Post Utme Skyline University 2023 Commerce Question 24

Practice objective / multiple choice question 24 from the 2023 Post Utme Skyline University Commerce examination.

Post Utme Skyline University 2023 Commerce Objective / Multiple Choice
Question 24 POST_UTME_SKYLINE_UNIVERSITY • 2023 • COMMERCE • objective

A firm has a production function given by the following equation: Q = 2L^2 + 3K where Q is the quantity produced, L is the labor input, and K is the capital input. The firm's objective is to maximize its profit, which is given by the equation: Profit = P * Q - (W * L + R * K) where P is the price of the good, W is the wage rate, and R is the rental rate of capital. Using the concept of production and cost, derive the firm's optimal input bundle.

Answer Options

A. The firm should use 2 units of labor and 1 unit of capital.
Correct Answer B. The firm should use 1 unit of labor and 2 units of capital.
C. The firm should use 3 units of labor and 1 unit of capital.
D. The firm should use 1 unit of labor and 3 units of capital.
Correct Answer
B
Correct Option:
The firm should use 1 unit of labor and 2 units of capital.

About This Question

This is Post Utme Skyline University 2023 Commerce Question 24. It is one of the objective questions from the 2023 Post Utme Skyline University Commerce examination.

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