Explain how you will test the joint hypothesis

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Reference no: EM131530059

Question: 1. In the multiple regression equation

Explain how you will test the joint hypothesis β1 = β2 and β3 = 1.

2. The following regression equation is estimated as a production function

1094_log q.png

cov(bK , bL) = - 0.044. The sample size is 40. Test the following hypotheses at the 5% level of significance.

(a) bK = bL.

(b) There are constant returns to scale.

Reference no: EM131530059

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