Question: Estimation of production functions for electric generating capacity is given by:

Note: The numbers in parenthesis are the standard errors.

1. Write the above log linear production function in the actual Cobb-Douglas functional form i.e. \(A{{K}^{\alpha }}{{L}^{\beta }}\)
2. Are the coefficients of \(\ln K\) and \(\ln L\) statistically significant?
3. What is the output elasticity of capital (i.e. E _K ) for the above function? Explain its meaning.
4. What type of returns to scale does this production function exhibit? Why?
5. Explain what the value for returns to scale you obtained in (d) means.

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