Neco Model Questions Vol1 2025 Economics Question 44

Practice objective / multiple choice question 44 from the 2025 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 44 NECO_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • objective

A firm produces output according to the Cobb‑Douglas function \(Q = 2L^{0.5}K^{0.5}\), where \(L\) is labour units and \(K\) is capital units. The price of labour is ₦5 per unit and the price of capital is ₦20 per unit. With a total budget of ₦200, determine the quantities of labour and capital the firm should employ to produce exactly \(Q = 20\) units at minimum cost.

Answer Options

A. Labour \(L = 10\) units, Capital \(K = 10\) units
B. Labour \(L = 15\) units, Capital \(K = 6\) units
C. Labour \(L = 25\) units, Capital \(K = 4\) units
Correct Answer D. Labour \(L = 20\) units, Capital \(K = 5\) units
Correct Answer
D
Correct Option:
Labour \(L = 20\) units, Capital \(K = 5\) units

About This Question

This is Neco Model Questions Vol1 2025 Economics Question 44. It is one of the objective questions from the 2025 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

View More Neco Model Questions Vol1 2025 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