Neco Model Questions Vol1 2022 Economics Question 45

Practice objective / multiple choice question 45 from the 2022 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2022 Economics Objective / Multiple Choice Medium Difficulty
Question 45 NECO_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • objective

A firm produces output according to the Cobb‑Douglas function \(Q = L^{0.6} K^{0.4}\), where \(L\) is labour (hours) and \(K\) is capital (units). The firm must produce \(Q = 100\) units. Input prices are wage \(w = \text{₦}15\) per labour hour and rental rate \(r = \text{₦}45\) per unit of capital. Determine the cost‑minimising quantities of labour and capital and compute the minimum total cost.

Answer Options

A. Labour ≈ 150.0 hours, Capital ≈ 55.6 units, Minimum cost ≈ ₦5,200
Correct Answer B. Labour ≈ 182.7 hours, Capital ≈ 40.6 units, Minimum cost ≈ ₦4,568
C. Labour ≈ 170.3 hours, Capital ≈ 45.0 units, Minimum cost ≈ ₦4,800
D. Labour ≈ 200.5 hours, Capital ≈ 35.2 units, Minimum cost ≈ ₦4,300
Correct Answer
B
Correct Option:
Labour ≈ 182.7 hours, Capital ≈ 40.6 units, Minimum cost ≈ ₦4,568

About This Question

This is Neco Model Questions Vol1 2022 Economics Question 45. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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