Gce Model Questions Vol1 2020 Geography Question 14

Practice objective / multiple choice question 14 from the 2020 Gce Model Questions Vol1 Geography examination.

Gce Model Questions Vol1 2020 Geography Objective / Multiple Choice Hard Difficulty
Question 14 GCE_MODEL_QUESTIONS_VOL1 • 2020 • GEOGRAPHY • objective

An industry's output is described by the Cobb‑Douglas function \(Q = 100 L^{0.6} K^{0.4}\), where \(L\) is the number of workers and \(K\) the number of machines. The firm currently employs 64 workers and 16 machines.\n(a) If labour is increased by 25 % while capital remains unchanged, what is the percentage increase in output?\n(b) If instead capital is increased by 50 % while labour stays at 64, which option gives the larger percentage increase in output?

Answer Options

A. Labour increase gives ≈16.0 % rise; capital increase gives ≈17.6 % rise - both increases are equal.
B. Labour increase gives ≈12.5 % rise; capital increase gives ≈15.0 % rise - capital increase is larger.
C. Labour increase gives ≈14.3 % rise; capital increase gives ≈13.0 % rise - labour increase is larger.
Correct Answer D. Labour increase gives ≈14.3 % rise; capital increase gives ≈17.6 % rise - capital increase is larger.
Correct Answer
D
Correct Option:
Labour increase gives ≈14.3 % rise; capital increase gives ≈17.6 % rise - capital increase is larger.

About This Question

This is Gce Model Questions Vol1 2020 Geography Question 14. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Geography examination.

Difficulty level: Hard .

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