# © Muehlenbachs 2023 This material is designed for use as part of Econ 323 at the University of Calgary and is the property of the instructor unless otherwise stated. Copying this material for...

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## Answer To: © Muehlenbachs 2023 This material is designed for use as part of Econ 323 at the University of...

Subhanbasha answered on Feb 14 2023
Q1).
a).
Ans:
The plot for the gas prices in the time between 1990 to 2000.
The above plot is gas prices in between the years 1990 and 2000. By observing the trend there is some fluctuations in the prices over the months an
d year but after mid of 1999 the prices of gas increased rapidly.
b).
Ans:
The plot for monthly production over the years that to in between 1990 and 2000 and drilled before 1990 year.
The above plot is clearly showing that after 1998 the production has increased rapidly and the before years there are some fluctuation but not that much rapid increase observed in the past years. So, after 1998 the production has increased in the wells where those are drilled before the year 1990.
c).
Ans:
The plot for average monthly production over the years that to in between 1990 and 2000 and drilled before 1960 year.
The above plot is clearly showing that the production has decreased and the before years there are some fluctuations, but not that much rapid increase observed in the past years. So, after 1997 the production has balanced in the wells where those are drilled before the year 1960. So, finally the average production has been decreased for whatever reasons where the wells are drilled before 1960.
d).
Ans:
Summary of the model
The above output is from R which is the summary of the model that contains variables price and production and that to considered only log transformation values.
The intercept here is 1.665569 which means without any price increase or increase that means zero values of price the production will be 1.665569 which means this is the starting point of the model when we plot the graph of regression line.
The coefficient value is 0.225052 which means that one unit increase in the price that will increase 0.225052 times of price in the production. That means there is positive relation price increases the production is increasing. The production is dependent on the price based on our model build in R.
Anyhow the model is not good model that we can say blindly by seeing the R square and adjusted R square values in the summary of the model.
Q2).
a).
Ans:
Here is the plot for the average length of laterals by the year to see the trend over the years of length of laterals.
From the above plot the length of laterals are decreased from the starting but after some point that is...
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