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Consider the function: log C(w, y) = 0 + log w + 2 log W2 + 11 (log w) + 22 (log W2)+ 212 log
Consider the function: log C(w, y) = 0 + log w + 2 log W2 + 11 (log w) + 22 (log W2)+ 212 log w log w+ log w log y + 2 log w log y + y log y + 0 (logy) 2, where w, W2 and y are input prices and output respectively. What restrictions should the parameters satisfy to ensure homogeneity of degree 1 in input prices
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