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QUESTION
Urban Economics - Needed in 1 hour 30 MINUTES- 1 question
Assume you run regression where you explain vineyard land profits as a function of temperature, rainfall and a time trend. The table below reports the results of two different models. The dependent variable is the natural logarithm of profits.
a) Which of the two equations do you prefer? Why?
b) Refer to Equation 1 and calculate the profit maximizing temperature. Show your
work.
