Neco 2025 Economics Question 4

Practice objective / multiple choice question 4 from the 2025 Neco Economics examination.

Neco 2025 Economics Objective / Multiple Choice Hard Difficulty
Question 4 NECO • 2025 • ECONOMICS • objective

A firm produces output according to the Cobb‑Douglas production function \( Q = 20 L^{0.5} K^{0.5} \), where \(L\) is labour units and \(K\) is capital units. The wage rate is ₦150 per unit of labour and the rental rate of capital is ₦200 per unit. The firm wishes to produce \(Q = 800\) units. Find the cost‑minimising quantities of labour and capital and the minimum total cost, rounding quantities to two decimal places and cost to the nearest naira.

Answer Options

A. Labour = 50.00 units; Capital = 30.00 units; Minimum total cost = ₦13,500
B. Labour = 40.00 units; Capital = 40.00 units; Minimum total cost = ₦14,000
Correct Answer C. Labour = 46.22 units; Capital = 34.62 units; Minimum total cost = ₦13,857
D. Labour = 45.00 units; Capital = 35.00 units; Minimum total cost = ₦13,900
Correct Answer
C
Correct Option:
Labour = 46.22 units; Capital = 34.62 units; Minimum total cost = ₦13,857

About This Question

This is Neco 2025 Economics Question 4. It is one of the objective questions from the 2025 Neco Economics examination.

Difficulty level: Hard .

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