1.Suppose a firm must pay an annual tax, which is a fixed sum, independent of whether it produces any output.

a.How does this tax affect the firm's fixed, marginal, and average costs?

b.Now suppose the firm is charged a tax that is proportional to the number of items it produces.Again, how does this tax affect the firm's fixed, marginal, and average costs?

11.A recent issue of Business Week reported the following:

During the recent auto sales slump, GM, Ford, and Chrysler decided it was cheaper to sell cars to rental companies at a loss than to lay off workers.That's because closing and reopening plants is expensive, partly because the auto makers' current union contracts obligate them to pay many workers even if they're not working.

When the article discusses selling cars "at a loss," is it referring to accounting profit or economic profit?How will the two differ in this case?Explain briefly.