Suppose Than an Economy Has Output Y = AK0

question 68

Multiple Choice

Suppose than an economy has output Y = AK0.3L0.7, that Y equals $12 trillion, capital K is $27 trillion, and labor L is 64 million workers. Given this information, what is the closest approximation of total factor productivity A?

• A) less than 0.01
• B) around 0.25
• C) roughly 0.33
• D) close to 0.4
• E) exactly 144

---

Definitions:

Neutral Territory

Neutral Territory describes a space or area where no individual, group, or entity has authority, control, or influence, allowing for impartial interactions or negotiations.

Win-lose Situation

is a scenario where for one party to win or succeed, another must lose or fail, often seen in competitive contexts.

Bargaining Zone

The range or area in negotiations in which parties are willing to compromise or make concessions in order to reach an agreement.

Resistance Point

The threshold beyond which a person or entity is unwilling to go during negotiations; it represents the limit of concessions they are willing to make.