Post Utme Rhema University 2023 Economics Question 46

Practice objective / multiple choice question 46 from the 2023 Post Utme Rhema University Economics examination.

Post Utme Rhema University 2023 Economics Objective / Multiple Choice

Question 46 POST_UTME_RHEMA_UNIVERSITY • 2023 • ECONOMICS • objective

A firm's production function is given by Q = 3L^0.5K^0.5. If the firm's current input prices are w = ₦250 and r = ₦500, and the current output price is p = ₦1000, calculate the firm's optimal input mix (L, K) u\sing the Hotelling's Lemma. Assume that the firm's objective is to maximize profits.

Answer Options

Correct Answer A. L = 250, K = 125

B. L = 125, K = 250

C. L = 312.5, K = 125

D. L = 125, K = 312.5

Correct Answer

Correct Option:

L = 250, K = 125

About This Question

This is Post Utme Rhema University 2023 Economics Question 46. It is one of the objective questions from the 2023 Post Utme Rhema University Economics examination.

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