1. A firm that earns only normal profit is not covering all its costs. Do you agree or disagree? Explain your answer. 2. The average variable cost curve and the average total cost curve get closer to each other as output increases. What explains this? 3. Explain why earning zero economic profit is not as bad as it sounds. 4. Why does the AFC curve continually decline (and get closer and closer to the quantity axis)? 5. What is the difference between diseconomies of scale and the law of diminishing marginal retums? 6. When would total costs equal fixed costs? 7. Is studying for an economics exam subject to the law of diminishing marginal returns? If so, what is the fixed input? What is the variable input? 8. Explain why a firm might want to produce its good even after diminishing marginal returns have set in and marginal cost is rising