Summer 2025
Assignment-2
Principles of Microeconomics
ECN 201, Sec 13
Dept. of Economics, SBE
1. A local lawn maintenance company trims bushes. The inputs the company uses to trim bushes
are an employee, who is paid a wage of $12 an hour, and a set of clippers, which cost $40. It
takes the worker two hours to trim the bushes for a residential yard. The clippers are durable
and can be used to trim bushes in many yards.
(a) Are labor hours a
xed or variable input? Is the pair of clippers
xed or variable?
Explain.
(b) Using MS Excel, determine the total cost (TC), total
xed cost (TFC), total variable
cost (TVC), average total cost (ATC), average
xed cost (AFC), average variable cost
(AVC), and the marginal cost (MC) of trimming bushes for residential lawns in the table
below. Show your result in a separate excel
le.
(c) Using Excel Charts to make the graph of ATC, AFC, AVC, and MC curves. (Show each
of them in dierent colors.)
Yards TC TFC TVC ATC AFC AVC MC
0
1
2
3
4
5
6
7
8
9
10
2. Delta Reliance Company has the following information
, Labor Employed Output (Quantity)
1 12
2 24
3 48
4 84
5 121
6 192
7 240
8 276
9 300
10 312
(a) Using the MS Excel to calculate Average Product of Labor (APL ) and the Marginal
Product of Labor (M PL ).
(b) Explain the diminishing Marginal Product of labor using the information from the table.
(c) Create the appropriate curves of (APL ) and (MPL )by using Excel Charts and show the
relationship between them?
3. Suppose, Nusrat usually consume two goods in her breakfast; Bread (X) and Cereal (Y) and
she faces the following budget equation: 5Qx + 10QY = 200.
(a) Draw the budget line of Nusrat and
nd out the slope of the budget equation and relative
income in terms of Bread and Cereal.
(b) Show the changes with the budget line when price of Bread and Cereal become $10 and
$5 respectively. Calculate the slope of the new budget line. Show the Nusrat's optimal
bundle of commodities where she consumes 12 slices of bread and 16 bowls of creal in
the whole week.
2
Assignment-2
Principles of Microeconomics
ECN 201, Sec 13
Dept. of Economics, SBE
1. A local lawn maintenance company trims bushes. The inputs the company uses to trim bushes
are an employee, who is paid a wage of $12 an hour, and a set of clippers, which cost $40. It
takes the worker two hours to trim the bushes for a residential yard. The clippers are durable
and can be used to trim bushes in many yards.
(a) Are labor hours a
xed or variable input? Is the pair of clippers
xed or variable?
Explain.
(b) Using MS Excel, determine the total cost (TC), total
xed cost (TFC), total variable
cost (TVC), average total cost (ATC), average
xed cost (AFC), average variable cost
(AVC), and the marginal cost (MC) of trimming bushes for residential lawns in the table
below. Show your result in a separate excel
le.
(c) Using Excel Charts to make the graph of ATC, AFC, AVC, and MC curves. (Show each
of them in dierent colors.)
Yards TC TFC TVC ATC AFC AVC MC
0
1
2
3
4
5
6
7
8
9
10
2. Delta Reliance Company has the following information
, Labor Employed Output (Quantity)
1 12
2 24
3 48
4 84
5 121
6 192
7 240
8 276
9 300
10 312
(a) Using the MS Excel to calculate Average Product of Labor (APL ) and the Marginal
Product of Labor (M PL ).
(b) Explain the diminishing Marginal Product of labor using the information from the table.
(c) Create the appropriate curves of (APL ) and (MPL )by using Excel Charts and show the
relationship between them?
3. Suppose, Nusrat usually consume two goods in her breakfast; Bread (X) and Cereal (Y) and
she faces the following budget equation: 5Qx + 10QY = 200.
(a) Draw the budget line of Nusrat and
nd out the slope of the budget equation and relative
income in terms of Bread and Cereal.
(b) Show the changes with the budget line when price of Bread and Cereal become $10 and
$5 respectively. Calculate the slope of the new budget line. Show the Nusrat's optimal
bundle of commodities where she consumes 12 slices of bread and 16 bowls of creal in
the whole week.
2
