Skip to content
We use only essential cookies to keep you signed in and remember your preferences. See our Cookie Policy.
TestStop
MocksPracticeResourcesIndiaBlogPricing
Sign in
Questions › DSE › DSE 2006 › Q5
1 markMicroeconomics › Costs of production › Cost minimisation and long-run input choiceModerateabout 2 min

DSE 2006 Question 5: Costs of production

Consider a firm that produces a single good using labour and capital. Let CCC, QQQ, LLL, KKK, www, rrr and ppp denote cost of production, output, labour input, capital input, the wage rate, the price of capital and the price of the output respectively. An example of a cost function for the firm is

Tap an option to check your answer.

Answer and worked solution

Checking your account…

Plain-text version

Consider a firm that produces a single good using labour and capital. Let C, Q, L, K, w, r and p denote cost of production, output, labour input, capital input, the wage rate, the price of capital and the price of the output respectively. An example of a cost function for the firm is (A) C=wL+rK (B) C=min {wL,rK} (C) C=pQ/[wL+rK] (D) C=Q√wr

Costs of production has come up 83 times in 7 exams since 2006.

What this question tests

This question is on Cost minimisation and long-run input choice, part of Costs of production in Microeconomics.

Choosing inputs to produce a given output at least cost, including across several plants.

TestStop has 22 past-paper questions on this subtopic; the nearest in year are below.

  • GATE 2021 · Q3For the production function Q=F(K,L)=√KL with P_K=4 and P_L=2, find the values of K and L that will minimize…
Practise Costs of productionMore on Cost minimisation and long-run input choice

Similar questions from other papers

  • CUET-PG 2026 · Q5A zero economic profit means that the firm is earning a
  • GATE 2026 · Q53In terms of the general relations among total cost, average cost and marginal cost, which of the following statements is/are FALSE?
  • IIT JAM 2026 · Q28A single-input production function is given by Q=L⁰·²⁵, where Q>0 and L>0 denote output and the single input. The unit price of L is w>0. The cost is C₁ when no output…
  • UGC-NET 2026 · Q52Which of the following level of utilization is considered as "Normal" by a firm?
  • CUET-PG 2025 · Q7If the marginal cost of a firm is given as the function of output, C′(Q) = 2 e^(0.2Q) and if the fixed cost is 75, find the total cost function.

Question from the DSE 2006 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.