In the equation
$Y = F ( K , L ) = \bar { A } K ^ { 1 / 3 } L ^ { 2 / 3 }$ ,
the "bar" over the A means that it is:
A) a parameter that is endogenous
B) a variable that is fixed but not exogenous
C) a parameter that is variable or exogenous
D) a variable that is endogenous
E) a parameter that is fixed and exogenous

Question

In the equation 
$Y = F ( K , L ) = \bar { A } K ^ { 1 / 3 } L ^ { 2 / 3 }$ , 
the "bar" over the A means that it is:
A) a parameter that is endogenous
B) a variable that is fixed but not exogenous
C) a parameter that is variable or exogenous
D) a variable that is endogenous
E) a parameter that is fixed and exogenous

Quizplus · Accepted Answer

The "bar" over the A indicates that it is a fixed parameter, and in economic models, such parameters are typically considered exogenous, meaning they are determined outside the model and do not change in response to the model's dynamics.

In the Equation Y=F(K,L)=AˉK1/3L2/3Y = F ( K , L ) = \bar { A } K ^ { 1 / 3 } L ^ { 2 / 3 }Y=F(K,L)=AˉK1/3L2/3

In the Equation $Y = F ( K , L ) = \bar { A } K ^ { 1 / 3 } L ^ { 2 / 3 }$