Question: The following regression equation is estimated as a production function. log Q 1.37 +0.632 log K + 0.452 log L 0257) 01219) R-0.98 cov (b.

The following regression equation is estimated as a production function. log Q 1.37 +0.632 log K + 0.452 log L 0257) 01219) R-0.98 cov

(b.

b) -0.044. The sample size is 40. Test the following hy- potheses at the 5% level of significance.

(a) bkb.

(b) There are constant returns to scale.

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