Neco 2021 Economics Question 38

Practice objective / multiple choice question 38 from the 2021 Neco Economics examination.

Neco 2021 Economics Objective / Multiple Choice Hard Difficulty
Question 38 NECO • 2021 • ECONOMICS • objective

A factory's production function is Cobb‑Douglas: \(Q = A L^{0.6} K^{0.4}\). With 120 labour‑hours and 80 units of capital the output is 500 units. The firm wishes to raise output by 20 % while keeping capital unchanged. How many additional labour‑hours are required? Also compute the marginal product of labour at the new output level.

Answer Options

Correct Answer A. Additional labour required ≈ 42.5 hours (new labour ≈ 162.5 h); MPL at the new level ≈ 2.22 units per hour.
B. Additional labour required ≈ 35.0 hours (new labour ≈ 155.0 h); MPL at the new level ≈ 2.10 units per hour.
C. Additional labour required ≈ 50.0 hours (new labour ≈ 170.0 h); MPL at the new level ≈ 2.35 units per hour.
D. Additional labour required ≈ 28.7 hours (new labour ≈ 148.7 h); MPL at the new level ≈ 1.95 units per hour.
Correct Answer
A
Correct Option:
Additional labour required ≈ 42.5 hours (new labour ≈ 162.5 h); MPL at the new level ≈ 2.22 units per hour.

About This Question

This is Neco 2021 Economics Question 38. It is one of the objective questions from the 2021 Neco Economics examination.

Difficulty level: Hard .

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