Post Utme Bowen University 2023 Commerce Question 2

Practice objective / multiple choice question 2 from the 2023 Post Utme Bowen University Commerce examination.

Post Utme Bowen University 2023 Commerce Objective / Multiple Choice
Question 2 POST_UTME_BOWEN_UNIVERSITY • 2023 • COMMERCE • objective

A company has a production function given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the price of labor increases by 20% and the price of capital remains constant, what will be the effect on the quantity produced?

Answer Options

A. The quantity produced will increase by 10%
Correct Answer B. The quantity produced will decrease by 10%
C. The quantity produced will remain unchanged
D. The quantity produced will increase by 20%
Correct Answer
B
Correct Option:
The quantity produced will decrease by 10%

About This Question

This is Post Utme Bowen University 2023 Commerce Question 2. It is one of the objective questions from the 2023 Post Utme Bowen University Commerce examination.

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