1) On a diagram draw each of the following curves for a ranch on a single diagram.

Average variable cost

Average total costs

Marginal costs

Average fixed costs

2) Using new diagrams illustrate and explain what happens to each of the curves in part 1) for each of the following cases: i. An increase in the price of fuel used to operate ranch machinery ii. An increase in the employment of labour associated with increased outputs produced on the ranch Use the denitions of the different costs to assist in determining which costs will change and clearly state any assumptions that apply