Neco Model Questions Vol1 2023 Economics Question 50

Practice objective / multiple choice question 50 from the 2023 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2023 Economics Objective / Multiple Choice Hard Difficulty
Question 50 NECO_MODEL_QUESTIONS_VOL1 • 2023 • ECONOMICS • objective

A firm produces output according to the Cobb‑Douglas production function \( Q = L^{0.5} K^{0.5} \). The wage rate is ₦30 per unit of labour and the rental rate of capital is ₦20 per unit. The firm wishes to produce \( Q = 100 \) units at minimum cost. (a) Find the cost‑minimising quantities of labour \( L \) and capital \( K \) and the minimum total cost. (b) If the product sells at a price of ₦60 per unit, calculate the maximum profit the firm can earn.

Answer Options

Correct Answer A. L ≈ 81.65, K ≈ 122.48; minimum cost ≈ 4899; maximum profit ≈ 1101
B. L ≈ 70.25, K ≈ 130.75; minimum cost ≈ 4800; maximum profit ≈ 1200
C. L ≈ 85.50, K ≈ 115.50; minimum cost ≈ 4950; maximum profit ≈ 1050
D. L ≈ 90.00, K ≈ 110.00; minimum cost ≈ 5000; maximum profit ≈ 1000
Correct Answer
A
Correct Option:
L ≈ 81.65, K ≈ 122.48; minimum cost ≈ 4899; maximum profit ≈ 1101

About This Question

This is Neco Model Questions Vol1 2023 Economics Question 50. It is one of the objective questions from the 2023 Neco Model Questions Vol1 Economics examination.

Difficulty level: Hard .

View More Neco Model Questions Vol1 2023 Economics Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support