The Cobb-Douglas function in Economics is a function to represent relationship between labour and capital input with respect to technology. The basic form of the function is
A more common form is
yt = β0 · xt1β1 · xt2β2 · eμt
The calculation can be simplified by taking log on the function as below:
ln yt = ln β0 + β1 ln xt1 + β2 ln xt2 + μt
Not only Multiple Regression is built-in in the TI Nspire so the calculation for this function is trivial, the 3-D graphing capability can also be utilized to visualise the function.
The lower plane is the plot of the Cobb-Douglas function using a set of sample data, with the upper plane plotting the return of scale, i.e. α + β. In this case it is > 1.