MATHEMATICS OF ECONOMICS – ASSIGNMENT NUMBER 1

PART I. DEFINE THE FOLLOWING TERMS (2 POINTS EACH)

1. Fixed Cost - are costs that remains constant

2. Variable Cost - are costs that may change due to internal and external factors
3. Total Cost - Sum of all non-variable expense
4. Total Variable Cost - if the quantity / output is zero (0) the first part will be 0
5. Total Fixed Cost - Sum of the money needed by a company to keep it’s operations functional

PART II. Fill up the Blank computation for Analysis of Cost (45 Pts)

UNITS: 0, 10, 20, 30, 40, 50, 60

TC : 80, 100, 120, 140, 160, 180, 200

Done

OUTPUT TFC TVC TC AFC AVC AC

0 80 0 80 0 0 0
10 80 20 100 8 2 10
20 80 40 120 4 2 6
30 80 60 140 2.67 2 4.67
40 80 80 160 2 2 4
50 80 100 180 1.6 2 3.6
60 80 120 200 1.33 2 3.33
PART III. 45 PONTS – DISCUSSION

UNITS 0 1 2 3 4 5 6
TC 60 80 100 111 116 130 150
TOTA
L AVERAG
FIXE TOTAL TOTA AVERAG E
D VARIABL L E FIXED VARIABL AVERAG MARGIN
OUTPUT COST E COST COST COST E COST E COST AL COST