Neco 2018 Economics Question 24

Practice objective / multiple choice question 24 from the 2018 Neco Economics examination.

Neco 2018 Economics Objective / Multiple Choice Hard Difficulty
Question 24 NECO • 2018 • ECONOMICS • objective

A factory produces output according to the Cobb‑Douglas function \(Q = 10 L^{0.5} K^{0.5}\). The wage rate is \(w = 200\) naira per unit of labor and the rental rate of capital is \(r = 500\) naira per unit of capital. To produce \(Q = 1000\) units at minimum cost, find the cost‑minimising quantities of labor \(L\) and capital \(K\) (to the nearest whole unit) and the minimum total cost (in naira).

Answer Options

A. L = 150, K = 70, minimum cost = 63500
B. L = 158, K = 63, minimum cost = 64000
Correct Answer C. L = 158, K = 63, minimum cost = 63246
D. L = 160, K = 60, minimum cost = 63000
Correct Answer
C
Correct Option:
L = 158, K = 63, minimum cost = 63246

About This Question

This is Neco 2018 Economics Question 24. It is one of the objective questions from the 2018 Neco Economics examination.

Difficulty level: Hard .

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