Neco Model Questions Vol1 2021 Economics Question 44

Practice objective / multiple choice question 44 from the 2021 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2021 Economics Objective / Multiple Choice Hard Difficulty
Question 44 NECO_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

A farmer produces wheat using labour \(L\) (units) and fertilizer \(F\) (units) with the Cobb‑Douglas production function \(Q = 20 L^{0.5} F^{0.5}\). The wage rate is N200 per unit of labour and fertilizer costs N150 per unit. The farmer wishes to produce exactly 800 units of wheat at minimum cost.\n\n(a) Find the cost‑minimising quantities of labour and fertilizer (to two decimal places).\n(b) Compute the total cost of producing 800 units.\n(c) Determine the marginal cost of an additional unit of wheat at this output (to two decimal places).

Answer Options

A. Labour 36.50 units, Fertiliser 44.00 units; Total cost N14,200; Marginal cost N16.80 per unit
B. Labour 30.00 units, Fertiliser 50.00 units; Total cost N13,500; Marginal cost N18.00 per unit
Correct Answer C. Labour 34.64 units, Fertiliser 46.19 units; Total cost N13,856; Marginal cost N17.32 per unit
D. Labour 32.20 units, Fertiliser 48.75 units; Total cost N13,950; Marginal cost N17.80 per unit
Correct Answer
C
Correct Option:
Labour 34.64 units, Fertiliser 46.19 units; Total cost N13,856; Marginal cost N17.32 per unit

About This Question

This is Neco Model Questions Vol1 2021 Economics Question 44. It is one of the objective questions from the 2021 Neco Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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