Question

Suppose the production(Y) is determined as a function of labour input in hours (L) and capital input in machine hours (K). Using the Cobb-Douglas function: 

 

Y= β0 +  β1K β1 + ek 

 

Write the procedure to estimate the coefficients of this function 

Answer 1

fY(y)=c(β)y3(1−y)β10<y<1