Post Utme Skyline University 2019 Commerce Question 37

Practice objective / multiple choice question 37 from the 2019 Post Utme Skyline University Commerce examination.

Post Utme Skyline University 2019 Commerce Objective / Multiple Choice
Question 37 POST_UTME_SKYLINE_UNIVERSITY • 2019 • COMMERCE • objective

A firm produces two goods, X and Y, using two inputs, labor (L) and capital (K). The production function for good X is given by Q_X = 2L^0.4K^0.6, while that for good Y is Q_Y = 3L^0.7K^0.3. If the firm has 100 units of labor and 80 units of capital, and it wants to maximize its total output, what should be the optimal allocation of labor and capital between the two goods?

Answer Options

Correct Answer A. Allocate 60 units of labor and 40 units of capital to good X, and 40 units of labor and 60 units of capital to good Y.
B. Allocate 80 units of labor and 20 units of capital to good X, and 20 units of labor and 80 units of capital to good Y.
C. Allocate 50 units of labor and 50 units of capital to good X, and 50 units of labor and 50 units of capital to good Y.
D. Allocate 30 units of labor and 70 units of capital to good X, and 70 units of labor and 30 units of capital to good Y.
Correct Answer
A
Correct Option:
Allocate 60 units of labor and 40 units of capital to good X, and 40 units of labor and 60 units of capital to good Y.

About This Question

This is Post Utme Skyline University 2019 Commerce Question 37. It is one of the objective questions from the 2019 Post Utme Skyline University Commerce examination.

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