2023-24

SUBSTITUTION WORKSHEET
Subject: ECONOMICS (Microeconomics)

TOPIC: Theory of cost

Class-XI
MM-30

1. Identify implicit cost and explicit cost in each of the individual cases. Give reason also. 4
(a) A person starts a taxi services. The taxi is financed by a bank. He himself derives the taxi. He
also pays annual license fees to government.
(b) A person starts a goods transport business. He purchase a goods carrier using partly his own
saving and partly borrows money. He derives the carrier himself.

2. Answer the following question: 4

(a) Why AC, AVC and MC curves U-Shaped?
(b) Why the gap between TC curves and TVC are remains constant with rise in output?
(c) Why AFC curves does never touches the X-axis?
(d) Why does TC curve and TFC curve start from the same point above the origin?

3. Why AFC curve is rectangular hyperbola? Give reason. 3

4. Determine TFC and TVC from the following data: 3

Output (units) 0 1 2
TC (rs) 100 120 130

5. Find MC from the following data: 3

Output (units) 1 2 3 4 5 6
AC(Rs) 60 40 30 26.25 28 35

6. A firm’s fixed cost is Rs 400. Compute TC, TVC, AFC, AVC, and AC from the following data: 6
Output (units) 1 2 3 4 5 6
MC (Rs) 150 110 130 150 210 310

7. Complete the following table: 4

Output (units) AFC(Rs) MC(Rs) TC(Rs)
1 72
2 10
3 20 8
4 99
5 12 10

8. Find TC and MC, given TFC is Rs 60. 3

Output (units) 0 1 2 3
AVC (Rs) 20 15 20