Gce Model Questions Vol1 2021 Economics Question 40

Practice objective / multiple choice question 40 from the 2021 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 40 GCE_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

A firm has the production function \( Q = L^{0.5}K^{0.5} \) and wishes to produce \( Q = 100 \) units. The wage rate for labour is \( w = £4 \) per unit and the rental rate for capital is \( r = £1 \) per unit. Determine the cost‑minimising quantities of labour \(L\) and capital \(K\) and the minimum total cost.

Answer Options

A. L = 40, K = 250, minimum cost = £440
B. L = 60, K = 150, minimum cost = £420
Correct Answer C. L = 50, K = 200, minimum cost = £400
D. L = 80, K = 100, minimum cost = £480
Correct Answer
C
Correct Option:
L = 50, K = 200, minimum cost = £400

About This Question

This is Gce Model Questions Vol1 2021 Economics Question 40. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support