Gce Model Questions Vol1 2021 Economics Question 13
Practice objective / multiple choice question 13 from the 2021 Gce Model Questions Vol1 Economics examination.
A firm produces output according to the Cobb-Douglas function \(Q = L^{0.5}K^{0.5}\). It currently employs \(L = 100\) units of labour and \(K = 400\) units of capital, with unit costs of labour £2 and capital £1. The firm wishes to increase output as much as possible while keeping total cost unchanged. What is the maximum output the firm can achieve under the existing cost constraint? Give your answer to two decimal places.
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About This Question
This is Gce Model Questions Vol1 2021 Economics Question 13. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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