Gce Model Questions Vol1 2017 Economics Question 40

Practice objective / multiple choice question 40 from the 2017 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2017 Economics Objective / Multiple Choice Medium Difficulty
Question 40 GCE_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

A firm's production function is \(Q = 10 L^{0.5} K^{0.5}\). Currently the firm employs \(L = 100\) units of labour and \(K = 25\) units of capital. Calculate (a) the marginal product of labour, (b) the marginal product of capital, and (c) state whether the firm is operating under increasing, constant, or decreasing returns to scale at this point.

Answer Options

A. MPL = 5, MPK = 5, constant returns to scale
B. MPL = 2.5, MPK = 5, decreasing returns to scale
Correct Answer C. MPL = 2.5, MPK = 10, constant returns to scale
D. MPL = 5, MPK = 10, increasing returns to scale
Correct Answer
C
Correct Option:
MPL = 2.5, MPK = 10, constant returns to scale

About This Question

This is Gce Model Questions Vol1 2017 Economics Question 40. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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