The following output is taken from an estimate of a simple Cobb-Douglas producti

Question

The following output is taken from an estimate of a simple Cobb-Douglas production function which tests whether the assumption of constant returns to scale holds. In the first model the coefficients are unconstrained. In the second model the coefficients on log capital and log labour are constrained to add to one

What is the F value of the test of this restriction?

Select one:

a. 120

b. 90

c. 30

d. 60

What is the 5% critical value for the test in the question above?

Select one:

a. 3.32

b. 4.18

c. 3.33

d. 4.17

The following output is taken from an estimate of a simple Cobb-Douglas production function which tests whether the assumption of constant returns to scale holds. In the first model the coefficients are unconstrained. In the second model the coefficients on log capital and log labour are constrained to add to one What is the F value of the test of this restriction? Select one: a. 120 b. 90 c. 30 d. 60 What is the 5% critical value for the test in the question above? Select one: a. 3.32 b. 4.18 c. 3.33 d. 4.17

Explanation / Answer

d. 60

a. 3.32

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