The Aggregate Production Function Is Y = 2K⁰

question 74

Multiple Choice

The aggregate production function is Y = 2K^0.5L0.5. If there are 225 units of capital and 196 units of labor, aggregate output is

• A) 420 units.
• B) 508 units.
• C) 700 units.
• D) 842 units.

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Definitions:

Net Income

The conclusive financial profit of a company after subtracting expenses and tax payments from its revenue stream.

Dividends

Funds dispensed by a business to its shareholders, allocating a fraction of the company's financial gains to them.

Operating Cash Flow

The cash generated from the normal operations of a company, reflecting the amount of cash earned from the production and selling of goods and services.

Depreciation Expense

The allocated portion of the cost of a fixed asset to expense over the asset's useful life to represent its use and wear and tear over time.