Post Utme Esut 2020 Commerce Question 4

Practice objective / multiple choice question 4 from the 2020 Post Utme Esut Commerce examination.

Post Utme Esut 2020 Commerce Objective / Multiple Choice

Question 4 POST_UTME_ESUT • 2020 • COMMERCE • objective

A company has a production function given by Q = 2L^0.5K^0.5, where L is labor and K is capital. If the company's budget constraint is given by W_L L + W_K K = 1000, where W_L is the wage rate and W_K is the rental rate of capital, and the company wants to maximize its profit, what is the optimal level of labor and capital?

A. (L, K) = (10, 20)

B. (L, K) = (20, 10)

Correct Answer C. (L, K) = (15, 15)

D. (L, K) = (25, 5)

Correct Answer

Correct Option:

(L, K) = (15, 15)

This is Post Utme Esut 2020 Commerce Question 4. It is one of the objective questions from the 2020 Post Utme Esut Commerce examination.

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