Gce Model Questions Vol1 2025 Economics Question 35

Practice objective / multiple choice question 35 from the 2025 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 35 GCE_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • objective

A firm produces output according to the Cobb‑Douglas production function \(Q = L^{0.5} K^{0.5}\), where \(L\) is labour units and \(K\) is capital units. The price of labour is \(w = ₦2\) per unit and the price of capital is \(r = ₦4\) per unit. The firm wishes to produce \(Q = 100\) units at minimum cost.\n\nDetermine the cost‑minimising quantities of labour and capital and compute the minimum total cost.

Answer Options

A. Labour \(L \approx 100.00\) units, Capital \(K \approx 100.00\) units, Minimum total cost ≈ ₦600.00
Correct Answer B. Labour \(L \approx 141.42\) units, Capital \(K \approx 70.71\) units, Minimum total cost ≈ ₦565.68
C. Labour \(L \approx 120.00\) units, Capital \(K \approx 80.00\) units, Minimum total cost ≈ ₦560.00
D. Labour \(L \approx 200.00\) units, Capital \(K \approx 50.00\) units, Minimum total cost ≈ ₦700.00
Correct Answer
B
Correct Option:
Labour \(L \approx 141.42\) units, Capital \(K \approx 70.71\) units, Minimum total cost ≈ ₦565.68

About This Question

This is Gce Model Questions Vol1 2025 Economics Question 35. It is one of the objective questions from the 2025 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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