Suppose K, L, and a Grow at Constant Rates Given $\bar { g } _ { k }$

question 62

Multiple Choice

Suppose k, l, and A grow at constant rates given by $\bar { g } _ { k }$ $\bar { g } _ {y}$
And $\bar { g } _ { A }$ '
What is the growth rate of y if $y = A k ^ { \beta } l ^ { 1 - \beta } , \beta > 0 ?$

• A) \(g _ { y } = \bar { g } _ { A } + \bar { g } _ { k } ^ { \beta } + \bar { g } _ { l } ^ { 1 - \beta }\)
• B) \(g _ { y } = \bar { g } _ { A } + \beta \left( \bar { g } _ { k } + \bar { g } _ { l } \right)\)
• C) \(g _ { y } = \beta \bar { g } _ { A } + \beta \bar { g } _ { \ell } + \beta \bar { g } _ { l }\)
• D) \(g _ { y } = \bar { g } _ { A } + \beta \bar { g } _ { k } + ( 1 - \beta ) \bar { g } _ { l }\)
• E) \(g _ { y } = \bar { g } _ { A } \times \beta \bar { g } _ { k } \times ( 1 - \beta ) \bar { g } _ { l }\)

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Definitions:

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific department, project, or segment of a business.

Common Fixed Expenses

Overhead costs that do not vary with the level of production or sales, shared across different segments of a business.

Business Segments

Distinct parts of a company that can be separately identified by the products or services they offer or by geographic regions.

Break-Even Calculations

An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue, indicating no net loss or gain.