A Cobb- Douglas production function was estimated for six types of farms. There were five inputs in the production function: (1) land, (2) labor, (3) equipment, (4) livestock and feed, and (5) other resource services. The exponent of each input was as follows:

a. Do there appear to be increasing returns to scale in any of these six types of farms?
b. In what type of farm does a 1% increase in labor have the largest percentage effect on output?
c. Based on these results, would you expect output to increase if many of the farms included in this sample were merged?

Exponent Livestock Other resource Farm type Land Labor Equipment and feed services Crop farms 0.24 0.07 Hog farms Dairy farms 0.1 0.0 0.53 0.74 0.63 0.46 0.53 0.43 0.02 0.03 0.02 0.03 0.03 0.03 0.08 0.07 0.02 0.06 0.16 General farms 0.17 0.12 Large farms 0.28 0.0 0.11 Small farms 0.2 0.05 0.08