CHAPTER 2: Graph Linear

Equation
NOTE : Linear Graph
 Review: Graph
➢Rectangular Coordinate System ➢ Slope of line (Gradient, m)
𝑪𝒉𝒂𝒏𝒈𝒆 𝒊𝒏 𝒚 𝒚𝟐 −𝒚𝟏
m = =
𝑪𝒉𝒂𝒏𝒈𝒆 𝒊𝒏 𝒙 𝒙𝟐 −𝒙𝟏
 Review: Graph
➢Equation of Straight Line

y = mx + c
 Review: Graph
➢Parallel lines ➢ Perpendicular lines
Have same value of slope (gradient) When one line has a slope of m, a
𝟏
perpendicular line has a slope of − 𝒎
𝒎𝟏 = 𝒎𝟐
 EXAMPLE 1

Plot the following points on graph paper:

i. (2,5), (1,3), (0,1), (-2,-3), (-3,-5)

ii. (-1,2), (-4,4), (5,-2), (2,0)

 EXAMPLE 2
Sketch the line 3x + 4y = 12
Let x = 0 , Let y = 0,
3(0) + 4y =12 3x + 4(0) = 12
4y =12 3x = 12
y = 12/4 x =12/3
∴𝑦 =3, 𝑃𝑜𝑖𝑛𝑡 (0,3) ∴𝑥 =4, 𝑃𝑜𝑖𝑛𝑡 (4,0)
3x + 4y = 12
 Review: Point intersection of the two lines

Example: y = x + 2 and y = 2x + 1
Substitute x = 1 into (1)
Let
y = (1) + 2
y = x + 2 ....(1)
y=3
y = 2x + 1….(2)
(2)-(1)
∴ 𝑤ℎ𝑒𝑛 𝑥 = 1 𝑡ℎ𝑒𝑛 𝑦 = 3
0=x–1
𝑜𝑟 (1,3)
∴𝑥=1
Intersection Point between line y = x + 1 and y = 2x + 1
 FUNCTION
A function, f , is a rule which assign to each incoming
number, x , a uniquely defined out going number, y.

𝑦 = 2𝑥 + 3 𝑜𝑟 𝑓(𝑥) = 2𝑥 + 3 read “f of 5 equals 13”

𝑦 = −3𝑥 + 10 𝑜𝑟 𝑔(𝑥) = −3𝑥 + 10 “g of 3 equals 1”

Independent and Dependent Variable
Microeconomics the quantity demanded, Q, of a good
depends on the market price, p
Q = 𝑓(𝑝) is a Demand function
The value of y clearly “depends” on the actual value of x that
is fed into the function
Example : 𝑓 𝑥 = −2𝑥 + 50 𝑎𝑛𝑑 𝑥 = 17
𝑓 17 = −2 17 + 50 = 16
 Macroeconomic
Economy is divided into 2 sectors – households and firms

National Income

❑ Represents the flow of income from firms to households given

as payment for these factors (factors of production – land,
capital, labour – to produce goods and services).
❑Households can spend this money
i) Consumption
ii) Saving
 Functions of Income, Y

𝑪 = 𝒇(𝒀) : Consumption function of Income Y

𝑺 = 𝒈(𝒀) : Saving function of Income Y
𝑪 = 𝒂𝒀 + 𝒃
𝒀 = 𝑪 + 𝑺
 Example 3
𝐷𝑒𝑡𝑒𝑟𝑚𝑖𝑛𝑒 𝑡ℎ𝑒 𝑠𝑎𝑣𝑖𝑛𝑔 𝑓𝑢𝑛𝑐𝑡𝑖𝑜𝑛 𝑤ℎ𝑖𝑐ℎ 𝑐𝑜𝑟𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑠 𝑡𝑜 𝑡ℎ𝑒
𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑓𝑢𝑛𝑐𝑡𝑖𝑜𝑛, 𝐶 = 0.8𝑌 + 25

Solution:
𝐶 = 0.8𝑌 + 25 𝑆 = 𝑌 − 0.8𝑌 − 25
𝑌 =𝐶+𝑆 𝑆 = 0.2𝑌 − 25
𝑌 = 0.8𝑌 + 25 + 𝑆 ∴ 𝑆 = 0.2𝑌 − 25
𝑌 − 0.8𝑌 − 25 = 𝑆
 Linear Cost Functions

Total Cost = Total Variable Cost + Total Fixed Cost

Total variable costs vary with the level of output and are
computed as the product of variable cost per unit of output and
the level of output.
Example – raw material and labor costs.
 Example 3
A small city police department is contemplating the purchase of an
additional patrol car. Police analysts estimate the purchase cost of
a fully equipped car (subcompact, but high powered) to be
RM18,000. They also have estimated an average operating cost of
RM0.40 per km.
a) Determine the mathematical function which represents the total
cost C of owning and operating car in term of the number of
miles x it is driven.
b) What are projected total costs if the car is driven 50,000 and
100,000 miles during its lifetime?
Solution:

a) C = f (x) = total operating cost + purchase cost

= (operating cost per km) (number of km) + purchase cost
C = 0.40x + 18,000

b) Car is driven 50,000: C = 0.40(50000)+18000 =RM38,000

Car is driven 100,000 km: C = 0.40(100000)+18000=RM58,000
 Example 4
A firm which produces a single product is interested in
determining the function that expressed annual total cost y as a
function of the number of units produced x. Accountants indicate
that fixed expenditures each year are RM50,000. They also have
estimated that raw material costs for each unit produced are
RM5.50, labour costs per unit are RM1.50 in the assembly
department, RM0.75 in the finishing room, and RM1.25 in the
packaging and shipping department.
Solution:

Total Cost function = Total Variable cost + Total Fixed Cost

𝑦 = 𝐶(𝑥)

y = total raw material cost + total labour cost + total fixed cost
𝑦 = 5.50𝑥 + (1.50𝑥 + 0.75𝑥 + 1.25𝑥) + 50,000
𝑦 = 9𝑥 + 50,000

The 9 represents the combined variable cost per unit of RM9. For
each additional unit produced, total cost will increase by RM9
 Linear Revenue Functions
REVENUE – The money which inflows into an organization
from either selling products or providing services.

Total revenue = (Price) x (Quantity Sold).

Suppose a firm sells n product. If 𝑥𝑖 equals the number of unit

sold of product i and 𝑝𝑗 equals the price of product j the function
of total revenue from the sale of the n product is
𝑹 = 𝒑𝟏 𝒙𝟏 + 𝒑𝟐 𝒙𝟐 + 𝒑𝟑 𝒙𝟑 + ⋯ 𝒑𝒏 𝒙𝒏
 Linear Profit Functions
Profit for an organization is the difference between total revenue
and total cost.

Profit = Total Revenue – Total Cost

P(x) = R(x) – C(x) where x equals the quantity produced and

sold.
 Example 5
A firm sells a single product for RM65 per unit. Variable
costs per unit are RM20 for materials and RM27.50 for labor.
Annual fixed costs are RM100,000. Construct the profit
function stated in term of x, the number of units produced and
sold. What profit is earned if annual sales are 20,000 units?
Solution:

Total Revenue: 𝑅(𝑥) = 65𝑥

Total Annual Cost: 𝐶 𝑥 = 20𝑥 + 27.50𝑥 + 100,000
𝐶(𝑥) = 47.50𝑥 + 100,000

Profit Function 𝑃(𝑥) = 𝑅(𝑥) – 𝐶(𝑥)

𝑃 𝑥 = 65𝑥 – 47.50𝑥 + 100,000
= 17.50𝑥 − 100,000

The slope of 17.50 indicates that for each additional unit produced and sold,
total profit increased by RM17.50 (referred to as marginal profit)

𝑷(𝟐𝟎, 𝟎𝟎𝟎) = 𝟏𝟕. 𝟓𝟎(𝟐𝟎, 𝟎𝟎𝟎) − 𝟏𝟎𝟎, 𝟎𝟎𝟎 = 𝟐𝟓𝟎, 𝟎𝟎𝟎

 Example 6
A corporate agricultural organization has 3 separate farms which
are to be used during the coming year. Each farm has unique
characteristics which make it most suitable for raising one crop
only. Table below indicates the crop selected for each farm, the
annual cost of planting 1 acre of the crop, the expected revenue to
be derived from each acre, and the fixed cost associated with
operating each farm. In addition, to the fixed cost associated with
operating each farm, the annual fixed costs of RM75,000 for the
corporation as a whole. Determine the profit function for the
three-farm operation
 Agricultural Planning
Information
Farm Crop Cost / Acre Revenue / Fixed Cost
(Cj) Acres (Rj) (Fj)

1 Ubikayu 900 1300 150,000

2 Keledek 1100 1650 175,000

3 Pisang 750 1200 125,000

Solution:

Total Revenue comes from the sale of crop planted at each of the 3 farms:
𝑅(𝑥1 , 𝑥2 , 𝑥3 ) = 𝑟1 𝑥1 + 𝑟2 𝑥2 + 𝑟3 𝑥3
= 1300𝑥1 + 1650𝑥2 + 1200𝑥3
Total Costs are the sum of those cost at the 3 farms plus the corporate fixed costs or
𝐶 𝑥1 , 𝑥2 , 𝑥3 = 𝑐1 𝑥1 + 𝐹1 + 𝑐2 𝑥2 + 𝐹2 + 𝑐3 𝑥3 + 𝐹2 + 75,000
= 900𝑥1 + 150,000 + 1100𝑥2 + 175,000 +
750𝑥3 + 125,000 + 75,000
= 900𝑥1 + 1100𝑥2 + 750𝑥3 + 525000

Total Profit, P(𝑥1 , 𝑥2 , 𝑥3 ) = R(𝑥1 , 𝑥2 , 𝑥3 ) – C(𝑥1 , 𝑥2 , 𝑥3 )

= 400𝑥1 + 550𝑥2 + 450𝑥3 - 525,000
 Example 7
The Flair Furniture Company produces inexpensive tables and
chair. The production process for each is similar in that both
require a certain number of hours of carpentry work and certain
number of labour hours in the painting and varnishing department.
Each table takes 4 hours of carpentry and 2 hours in the painting
and varnishing shop. Each chair requires 3 hours in carpentry and
1 hour in painting and varnishing. During the current production
period, 240 hours of carpentry are available and 100 hours in
painting and varnishing are available. Each table sold yields a
profit of RM7; each chair produced is sold for a RM5 profit.
Determine the best possible combination of tables and chairs to
manufacture in order to reach the maximum profit.
 Flair Furniture Company Data
Hours Required to Produce One Unit
Available
X1 X2
Department Hours This
Tables Chairs
Week
Carpentry 4 3 240
Painting/Varnishing 2 1 100

Profit/unit $7 $5
4 X1 + 3 X 2  240 (carpentry)
Constraints:
2 X1 + 1 X 2  100 (painting & varnishing)
Objective: Maximize: 7 X1 + 5 X 2
 Flair Furniture Company
Constraints
120

Number of Chairs
100
Painting/Varnishing
80

60

40
Carpentry
20

0
20 40 60 80 100
Number of Tables
Flair Furniture Company Feasible
Region
120

Number of Chairs
100
Painting/Varnishing
80

60

40 Carpentry
Feasible
20
Region
0
20 40 60 80 100
Number of Tables
 Flair Furniture Company
Isoprofit Lines
120

Number of Chairs
100
Painting/Varnishing
80 7X1 + 5X2 = 210
60 7X1 + 5X2 = 420

40 Carpentry
20

0
20 40 60 80 100
Number of Tables
 Flair Furniture Company
Optimal Solution
120
2
Number of Chairs
100
Painting/Varnishing
80
Solution
60
(X1 = 30, X2 = 40)
40 Carpentry
3
20
1
0
20 404 60 80 100
Number of Tables
 EXERCISE 1
1. Sketch the line:
a) y = 3x + 2 f) y = 5x + 9
b) y = -2x + 2 g) y = 3x -1
c) y=½x+2 h) 2x + y = 4
d) 4x + 3y =11 i) x + y =1
e) 2x +y =5 j) 6x + 5y =15
2. Find the point intersection:

a) 3x − 2y = 4 and x − 2y = 2

b) 4x + 3y = 11 and 2x + y = 5

c) y = 3x − 1 and y = 2x + 1

d) 2x + y = 6 and x − y = −3

e) 2x + 3y = 5 and 5x − 2y = −16

f) 3x + 4y = −12 and − 2x + 3y = 25
1) Sketch and solve simultaneous linear equation
i) 2𝑥 + 𝑦 = 4 𝑎𝑛𝑑 4𝑥 − 3𝑦 = 3
ii) 𝑥 + 𝑦 = 1 𝑎𝑛𝑑 6𝑥 + 5𝑦 = 15

2) The book value of a machine is expressed by the equation 𝐕 =

𝟔𝟎𝟎𝟎𝟎 − 𝟕𝟓𝟎𝟎𝒕 where V equals the book value in dollars and t
equals the age of the machine expressed in years.
a) Identify the t and V intercept
b) Interpret the meaning in (a)
c) Interpret the meaning of the slope
d) Sketch the function
3) Sketch 𝑃 = −2𝑄 + 50 and determine the value of
(a) P when Q = 9
(b) Q when P = 10

4) Sketch 𝑃 = −3𝑄 + 75 and determine the value of

(a) P when Q = 23
(b) Q when P = 18

5) Sketch a graph of the consumption function 𝐶 = 0.6𝑌 + 10.

and determine the corresponding savings function and sketch its
graph.
6) A company produces a product which sells for RM55 per unit. Each unit costs the firm
RM23 in variable expenses, and fixed cost on an annual basis are RM400,000. If x
equals the number of units produced and sold during the year?
a) Formulate the linear total cost function, total revenue function and profit function.
b) What does annual profit equal if 10,000 units are produced and sold during the year?
c) What level of output is required in order to earn zero profit?

7) Ridership on a small regional airline has been declining, approximately at a linear rate.
In 1981 the number of passengers was 245,000; in 1986 the number was 215,000. If n
equals the number of passengers using the airline per year and t equals time measured in
year (𝑡 = 0 for 1981)
a) Determine the linear estimating function 𝑛 = 𝑓(𝑡)
b) Interpret the meaning of the slope
c) What is the number of riders expected to equal in the year 2000?
d) It is estimated that the airline will go out of business if ridership falls below 180,000.
According to your function in part a, when will this happen?
6) A small manufacturer produces 2 kinds of good, A and B, for
which demand exceeds capacity. The production costs for A and
B are RM6 and RM3, respectively, each, and the corresponding
selling prices are RM7 and RM4. In addition, the transport cost
are 20 cents and 30 cents for each good of type A and B
respectively. The conditions of a bank loan limit the
manufacturer to maximum weekly production costs of RM2700
and maximum weekly transport costs of RM120. How should the
manufacturer arrange production to maximize profit?
Answer: The maximum weekly profit is RM405, which occurs when
375 goods of type A and 150 goods of type B are manufactured.
EXERCISES 2
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