Name: Date:

Activity 7
Budget Line and Indifference Curve

Objectives:
 To define BL and IC
 To graph BL and IC
 To solve for possible contributions of products.
 To illustrate optimum combination of products.

Questions:
1. How is BL different from IC?
2. Graph a Budget Line given the ff.
B= 600 php
P1= 60 php
P2= 30 php
3. Using the values given in #2, give at least 2 possible combination of products.
MRS
4. Present different combinations of product 1 and 2. Specify your products.
The Slope of IC
Marginal Rate of Substitution should be decreasing.
5. Illustrate an Indifference map and the Budget Line. Introduce different combinations of
products on different IC. Assign your own values for utility level and OCP. Optimum
Combination of Products.
Name: Date:

Activity 8
Isocost and Isoquant

Objectives:
 To describe an isocost and isoquant
 To graph an isocost and isoquant
 To solve for possible combination of inputs
 To illustrate OCI

Questions:
1. How is isocost different from isoquant?
2. Graph an isocost given the ff: P1=Php . 120 P2=Php . 60 present a table of
values showing the extreme points
3. Using the values given in #2 given possible combination of input.
4. Present different combinations of inputs 1 and 2. Specify your input. Marginal
rate of technical substitution should be decreasing/going down. Base on the
table of values, graph the isoquant.
5. Prepare an isoquant map and isocost. Encircle the OCI. Assign your own
values for level of output and T/total cash output. Summarize your result in
tabular form.
Name: Date:

Activity 9
Optimum Combination of Products (OCP) and Optimum Combination of Inputs

Objectives:
 To illustrate OCP and OCI

Questions:
1. By means of Graph show that combination A is the OCI and not B, C, D, and
E.
2. By means of graph show that combination M is the OCP and not N, T, E, B
and A.
Name: Date:

Activity 10
TR and TC Equations

Objectives:
 To Formulate TR and TC equations
 To Graph TR and TC equations

Questions:
1. Based on the equation TR=bQ formulate 5 TR equations
2. Based on the equation TC= a + bQ, formulate 5 TC equations
3. Graph 1 TR equation and 1 TC equations
Name: Date:

Activity 11
Break-Even Analysis

Objectives:
 To graph Linear TR and Linear TC equations
 To determine break-even volume or Qb using graphical method.

Questions:
1. Graph a linear TR equation and a linear TC equation. Identify the break-
even point (BEP) and the break-even volume (Qb).
Name: Date:

Activity 12
Break-even volume
Objectives:
 To Solve for Qb using mathematical method
 To determine Qb using graphical method

Questions:
1. Formulate 1 TR and 1 TC equations. Illustrate how Qb is determined using
graphical method
2. Solve for the following:
TR=50Q
TC= 500 + 25Q
Name: Date:

Activity 13
Ways of Increasing Profit

Objectives:
 To Describe the ways of increasing profit
 To determine which method will give the highest profit.

Questions:
1. Based on the formula TR-TC = TI. Describe 3 ways of increasing profit.
Assign numerical values.
2. Apply the following methods:

a. TR TC

b. TR TC

c. TR TC