Neco 2021 Economics Question 20

Practice objective / multiple choice question 20 from the 2021 Neco Economics examination.

Neco 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 20 NECO • 2021 • ECONOMICS • objective

The firm's production function is \(Q = 4L^{0.5}K^{0.5}\), where \(L\) is labour units and \(K\) is capital units. The firm currently employs \(L = 16\) and \(K = 9\). (a) Compute the current output. (b) The firm wishes to increase output by 20 % while keeping the labour‑to‑capital ratio unchanged. Determine the new quantities of labour and capital required. (c) Calculate the marginal product of labour at the original input levels.

Answer Options

A. (a) 42 units; (b) L = 20.5 units, K = 11.5 units; (c) MPL = 1.4 output per labour unit.
Correct Answer B. (a) 48 units; (b) L = 19.2 units, K = 10.8 units; (c) MPL = 1.5 output per labour unit.
C. (a) 36 units; (b) L = 18.0 units, K = 10.2 units; (c) MPL = 1.2 output per labour unit.
D. (a) 54 units; (b) L = 19.2 units, K = 9.6 units; (c) MPL = 1.8 output per labour unit.
Correct Answer
B
Correct Option:
(a) 48 units; (b) L = 19.2 units, K = 10.8 units; (c) MPL = 1.5 output per labour unit.

About This Question

This is Neco 2021 Economics Question 20. It is one of the objective questions from the 2021 Neco Economics examination.

Difficulty level: Medium .

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