Neco Model Questions Vol1 2023 Economics Question 29
Practice objective / multiple choice question 29 from the 2023 Neco Model Questions Vol1 Economics examination.
A firm produces output according to the Cobb‑Douglas function \(Q = 20 L^{0.5} K^{0.5}\). The price of labour is \(w = ₦150\) per unit and the rental rate of capital is \(r = ₦200\) per unit.\n\n(a) To produce \(Q = 500\) units at minimum cost, determine the cost‑minimising quantities of labour \(L\) and capital \(K\) and the total cost.\n(b) If the wage rises to \(w' = ₦250\) while \(r\) remains unchanged, find the new cost‑minimising input mix and the new total cost.\n(c) Calculate the percentage increase in total cost caused by the wage rise.
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About This Question
This is Neco Model Questions Vol1 2023 Economics Question 29. It is one of the objective questions from the 2023 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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