The Rule of 70 States That

question 19

Multiple Choice

The rule of 70 states that:

• A) if y_t grows at a rate of g percent per year, then the number of years it takes y_t to double is approximately equal to 70/g
• B) if y_t grows at a rate of g percent per year, then the number of years it takes y_t to double is exactly equal to 70/g
• C) if y_t grows at a rate of g percent per year, then the number of years it takes y_t to double is approximately equal to g/70
• D) if y_t grows at a rate of g percent per year, then the number of years it takes y_t to triple is approximately equal to 70/g
• E) if y_t grows at a rate of g percent per year, then the number of years it takes y_t to double is approximately equal to 70/(1 + g)

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Definitions:

AFC

Average Fixed Costs, which are total fixed costs divided by the quantity of output produced.

AVC

Average Variable Cost; the total variable costs divided by the quantity of output produced.

ATC

Average Total Cost, which is the total cost divided by the quantity of output produced, representing the per-unit production cost.

Marginal Product

The additional output derived from the addition of one more unit of a variable input, holding all other inputs constant.