Neco 2017 Economics Question 4

Practice objective / multiple choice question 4 from the 2017 Neco Economics examination.

Neco 2017 Economics Objective / Multiple Choice Hard Difficulty
Question 4 NECO • 2017 • ECONOMICS • objective

A farmer's maize yield per hectare (in tonnes) depends on the amount of nitrogen fertilizer N (kg ha\(^{-1}\)) according to \( Y = 2 + 0.04N - 0.0001 N^{2} \). The market price of maize is ₦30,000 per tonne. Fertilizer costs ₦20 per kg and other variable costs amount to ₦10,000 per hectare. The farmer can spend at most ₦50,000 on fertilizer per hectare. Determine the quantity of fertilizer (kg ha\(^{-1}\)) that maximises profit per hectare, the corresponding profit, and state whether the budget constraint is binding.

Answer Options

A. Optimal fertilizer ≈ 100 kg ha⁻¹; maximum profit ≈ ₦120,000 per hectare; budget not binding
B. Optimal fertilizer ≈ 250 kg ha⁻¹; maximum profit ≈ ₦150,000 per hectare; budget binding
C. Optimal fertilizer ≈ 180 kg ha⁻¹; maximum profit ≈ ₦170,500 per hectare; budget not binding
Correct Answer D. Optimal fertilizer ≈ 197 kg ha⁻¹; maximum profit ≈ ₦166,033 per hectare; budget not binding
Correct Answer
D
Correct Option:
Optimal fertilizer ≈ 197 kg ha⁻¹; maximum profit ≈ ₦166,033 per hectare; budget not binding

About This Question

This is Neco 2017 Economics Question 4. It is one of the objective questions from the 2017 Neco Economics examination.

Difficulty level: Hard .

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