Post Utme Pan Atlantic University 2021 Economics Question 28

Practice objective / multiple choice question 28 from the 2021 Post Utme Pan Atlantic University Economics examination.

Post Utme Pan Atlantic University 2021 Economics Objective / Multiple Choice
Question 28 POST_UTME_PAN-ATLANTIC_UNIVERSITY • 2021 • ECONOMICS • objective

Consider a firm that produces two goods, A and B. The production function for good A is given by Q_A = 2L_A^0.5K_A^0.5, and the production function for good B is given by Q_B = 2L_B^0.5K_B^0.5. If the firm's budget constraint is given by 100L_A + 200K_A + 100L_B + 200K_B = ₦10,000, and if the price of good A is ₦100 per unit and the price of good B is ₦200 per unit, determine the optimal values of L_A, K_A, L_B, and K_B that maximize profits.

Answer Options

A. L_A = 10, K_A = 20, L_B = 5, K_B = 10
B. L_A = 20, K_A = 10, L_B = 10, K_B = 5
Correct Answer C. L_A = 15, K_A = 15, L_B = 15, K_B = 15
D. L_A = 25, K_A = 5, L_B = 25, K_B = 5
Correct Answer
C
Correct Option:
L_A = 15, K_A = 15, L_B = 15, K_B = 15

About This Question

This is Post Utme Pan Atlantic University 2021 Economics Question 28. It is one of the objective questions from the 2021 Post Utme Pan Atlantic University Economics examination.

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