Discussion3.1: Production

Consider the three articles onestimating production and cost functions for this LP.  Now consider thatyou have been hired by a firm to estimate the production capabilities and theper unit costs of the firm’s competition.  How easy or difficult will itbe for you to complete your task?  What tools, data, and techniques willyou use to be able to estimate the output and costs of the competingfirms?  Defend your answers and cite your sources. 

1.  Parkin,D., & Hollingsworth, B. (1997). Measuring production efficiency of acutehospitals in Scotland, 1991-94: Validity issues in data envelopment analysis. AppliedEconomics, 29(11), 1425-1433.doi:10.1080/000368497326255

Manonmani, M. M. (2013). A stochastic frontier production function approachto Indian textile industry. Indian Journal Of IndustrialRelations,48(4),703-710. 

Mairesse, J., & Jaumandreu, J. (2005). Panel-data estimates of theproduction function and the revenue function: What difference does it make?. ScandinavianJournal Of Economics, 107(4), 651-672.doi:10.1111/j.1467-9442.2005.00431.x

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Discussion 3.2: Costs

Discuss why is it important for a firm manager to be able to differentiatebetween the different types of costs such as historical costs, accountingcosts, opportunity costs, long run costs, short run costs, private costs, andsocial costs?  How can knowing this differentiation be used by thefirm’s manager to the firm’s benefit?  Then, using the NAU library, findand discuss articles about firms that illustrate these 7 different types ofcosts in the real world. (Note: you will probably need to use more than onearticle to be able to discuss all of these different costs)  Defend youranswer and cite your sources

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These discussions aretwo separated discussions.