Neco Model Questions Vol1 2017 Economics Question 30

Practice objective / multiple choice question 30 from the 2017 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2017 Economics Objective / Multiple Choice Hard Difficulty
Question 30 NECO_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

A firm must transport 500 tonnes of wheat to market. Two transport modes are available:\n\n- Rail: fixed cost ₦5 000 plus ₦5 per tonne, maximum 300 tonnes per shipment.\n- Truck: fixed cost ₦20 000 plus ₦30 per tonne, unlimited capacity.\n\nThe firm may split the shipment between the two modes. (i) Determine the allocation of tonnes to rail and to truck that minimises total transport cost. (ii) Compute the minimum total cost and the percentage saving relative to using only trucks. Give costs in naira and the saving percentage to two decimal places.

Answer Options

A. Rail = 250 t, Truck = 250 t; Minimum total cost = ₦33,750; Saving = 3.57%
B. Rail = 300 t, Truck = 200 t; Minimum total cost = ₦33,000; Saving = 5.71%
C. Rail = 0 t, Truck = 500 t; Minimum total cost = ₦35,000; Saving = 0.00%
Correct Answer D. Rail = 300 t, Truck = 200 t; Minimum total cost = ₦32,500; Saving = 7.14%
Correct Answer
D
Correct Option:
Rail = 300 t, Truck = 200 t; Minimum total cost = ₦32,500; Saving = 7.14%

About This Question

This is Neco Model Questions Vol1 2017 Economics Question 30. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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