Neco Model Questions Vol1 2022 Economics Question 28
Practice objective / multiple choice question 28 from the 2022 Neco Model Questions Vol1 Economics examination.
A firm uses the Cobb‑Douglas production function \(Q=K^{0.4}L^{0.6}\), where \(K\) is capital in million Naira and \(L\) is labour in thousand worker‑hours. Currently \(K=16\) and \(L=27\). The output price is \(\text{₦}500\) per unit, the rental rate of capital is \(\text{₦}40\) per million Naira and the wage rate is \(\text{₦}30\) per thousand worker‑hours.\n(a) Compute the firm's profit (or loss) per period with the given inputs.\n(b) Determine the marginal revenue product of labour (MRP\(_L\)) and state whether the firm is employing the profit‑maximising amount of labour.
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About This Question
This is Neco Model Questions Vol1 2022 Economics Question 28. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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