Question

Based on the production function parameter estimates reported in Table 7.4:
1. Which industry (or industries) appears to exhibit decreasing returns to scale? (Ignore the issue of statistical significance).
2. Which industry comes closest to exhibiting constant returns to scale?
3. In which industry will a given percentage increase capital result in the largest percentage increase in output?
4. In what industry will a given percentage increase in production workers result in the largest percentage increase in output?



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  • CreatedSeptember 19, 2013
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