Define a Cobb-Douglas production function and explain all the terms of the Cobb-Douglas production function.

Find the output elasticities with respect to labour and capital of the Cobb-Douglas production function and also find their marginal products.

The estimation of the Cobb-Douglas production of a developed country is given below:

Answer the following questions:
(i) Looking at the results what you can say about the model?
(ii) Explain the output elasticities with respect to labour and capital.
(iii) Test the null hypothesis 0 j H : ???? = 0, ( j = 1, 2) against a suitable alternative hypothesis and make comments from your results.
(iv) If TSS = 2.765, then find the Adjusted(R2 ) and compare it with R2 .
(v) Do you think the production function is a decreasing return to scale? Why?
(vi) Obtain the estimated equation.

Dependent Variable log(Q): Estimated by OLS method Usable Observations Mean of Dependent Variable Std Error of Dependent Variable Standard Error of Estimate The sum of Squared Residuals Regression F(2,39) Significance Level of F Log Likelihood Durbin-Watson Statistic Variable 42 12.2260 0.38149 0.02828 0.01361 1719.2311 0.00000 44.5522 0.42567 Coefficient Standard Error 1. Constant -1.6524 0.6062 2. log(L) 3. log(K) 0.3397 0.1857 0.8460 0.0934