Post Utme Crawford University 2020 Economics Question 37

Practice objective / multiple choice question 37 from the 2020 Post Utme Crawford University Economics examination.

Post Utme Crawford University 2020 Economics Objective / Multiple Choice
Question 37 POST_UTME_CRAWFORD_UNIVERSITY • 2020 • ECONOMICS • objective

A firm is considering two different production techno\logies: one that uses a lot of labor and another that uses a lot of capital. The firm's production function is given by Q = 10L^0.5K^0.5, where Q is the quantity produced, L is the amount of labor used, and K is the amount of capital used. If the firm has a budget constraint of 100 units of labor and 50 units of capital, and the wage rate is 10 units of output per unit of labor, and the rental rate of capital is 20 units of output per unit of capital, which techno\logy should the firm choose?

Answer Options

Correct Answer A. The labor-intensive techno\logy
B. The capital-intensive techno\logy
C. Both techno\logies are equally profitable
D. Neither techno\logy is profitable
Correct Answer
A
Correct Option:
The labor-intensive techno\logy

About This Question

This is Post Utme Crawford University 2020 Economics Question 37. It is one of the objective questions from the 2020 Post Utme Crawford University Economics examination.

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