Answer Happy

Question 1 (33.3 Marks) Universal Locks Limited, a small producer of motorcycle tires has the following production function: Q-60K 1,4 The firm can sell all of its output for 4 GHS. The price of labour and capital are 5 GHS and 15 GHS respectively. a) What is the marginal product of labour and the marginal product of capital? b) Determine the optimal levels of capital and labour usage if the firm's operating budget is 1,000 GHS. c) Calculate the firm's total profit at the optimal levels of capital and labour. d) If the price of labour went up by 20 GHS, will the firm be producing efficiently? If not, explain what the firm can do to produce efficiently
(33.3 MARKS) Question 2 a) Sompa advertises to sell cookies for 4 GHS a dozen. She sells 50 dozen, and decides that she can charge more. She raises the price to 6 GHS a dozen and sells 40 dozen. What is the elasticity of demand? Assuming that the