Gce Model Questions Vol1 2024 Economics Question 44

Practice objective / multiple choice question 44 from the 2024 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2024 Economics Objective / Multiple Choice Hard Difficulty
Question 44 GCE_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

An agricultural firm produces wheat with the production function \(Q = 0.5 L^{0.8} K^{0.2}\), where \(L\) is labour hours and \(K\) is capital units. The firm has a fixed capital stock of \(K = 100\) units. The market price of wheat is \$200 per ton and the wage rate for labour is \$100 per hour.\n(a) Determine the number of labour hours that maximises profit.\n(b) Calculate the corresponding output, total revenue, total labour cost and profit. Give profit to the nearest dollar.

Answer Options

A. Profit ≈ $650 (using about 28 labour hours and 17.0 tons output)
B. Profit ≈ $750 (using about 30 labour hours and 18.5 tons output)
C. Profit ≈ $900 (using about 35 labour hours and 22.0 tons output)
Correct Answer D. Profit ≈ $818 (using about 33 labour hours and 20.4 tons output)
Correct Answer
D
Correct Option:
Profit ≈ $818 (using about 33 labour hours and 20.4 tons output)

About This Question

This is Gce Model Questions Vol1 2024 Economics Question 44. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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