On the answer sheet provided are fifteen pairs of axes for graphs.

On each one a cost curve depicting a particular set of circumstances can be drawn.

Example: Fixed costs

You are required to draw cost curves depicting each of the following independent sets of circumstances on the printed answer sheet provided:
(i) y= x;
(ii) y= a+ bx;
(iii) y= a+ bx+ cx2;
(iv) step-cost;
(v) total cost of buying goods subject to a reduction in unit pnce, which applies only to further goods purchased, after a certain cumulative sum of purchases has been made;
(vi) total cost of buying goods in short supply, so that after the purchase of a certain cumulative sum the unit price of any further goods purchased increases;
(vii) total cost of buying electricity on a two-part tariff, being a fixed rental charge plus a constant cost per unit used;

(viii) marginal cost of a firm with a slowly declining long-run average cost curve;
(ix) total cost of a firm experiencing a learning-curve phenomenon;
(x) total cost of buying a transport service at a constant unit price, but for which a deterred rebate is given after a certain quantity has been purchased;
(xi) average fixed cost per unit of activity;
(xii) total cost of an incentive bonus given at a constant rate per unit of output after a certain level of output;
(xiii) total cost of telephone charges, given three elements which are:
(1) a fixed rental, (2) a certain amount of free calling time before any call charge is levied, (3) a certain amount of calling time IS charged at a constant rate per unit of time up to a given maximum amount of calling time after which calling time is again free of charge;
(xiv) cost of a year's depreciation charged on the sum-of-theyears'-
digits basis;
(xv) total cost of rent on factory which is leased from the local authority under an employment generation scheme, such that the rent is a fixed certain sum which is waived if more than a certain number of direct labour-hours is worked in a year.

Transcribed Image Text:

A 0 Cumulative level of relevant activity in a year