Neco Model Questions Vol1 2021 Economics Question 50

Practice objective / multiple choice question 50 from the 2021 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2021 Economics Objective / Multiple Choice Hard Difficulty
Question 50 NECO_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

A factory produces widgets with the production function \(Q = 10\sqrt{L K}\), where \(L\) is the number of workers and \(K\) the number of machines. Capital is fixed at \(K = 25\) machines. The wage rate is ₦100 per worker per day, the rental rate of capital is ₦150 per machine per day, and the market price of a widget is ₦200. (a) Determine the profit‑maximising number of workers, the output level and the daily profit. (b) If a per‑unit tax of ₦50 is imposed on each widget, recompute the optimal labour, output and profit.

Answer Options

A. a) L=2,000 workers, Q=2,000 units, profit=₦200,000; b) L≈1,200 workers, Q=1,500 units, profit=₦110,000
B. a) L=3,000 workers, Q=3,000 units, profit=₦300,000; b) L≈1,600 workers, Q=2,000 units, profit=₦150,000
C. a) L=2,500 workers, Q=2,500 units, profit=₦250,000; b) L≈1,500 workers, Q=1,800 units, profit=₦140,000
Correct Answer D. a) L=2,500 workers, Q=2,500 units, profit=₦246,250; b) L≈1,406 workers, Q=1,875 units, profit=₦136,875
Correct Answer
D
Correct Option:
a) L=2,500 workers, Q=2,500 units, profit=₦246,250; b) L≈1,406 workers, Q=1,875 units, profit=₦136,875

About This Question

This is Neco Model Questions Vol1 2021 Economics Question 50. It is one of the objective questions from the 2021 Neco Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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