3) For the following questions, circle the correct answer. A) A firm is producing 1,000 units at a total cost of $5,000. If it were to increase production to 1,001 units, its total cost would rise to $5,008. What does this information tell you about the firm? a) Marginal cost is $5, and average variable cost is $8. b) Marginal cost is $8, and average variable cost is $5. c) Marginal cost is $5, and average total cost is $8. d) Marginal cost is $8, and average total cost is $5. B) A firm is producing 20 units with an average total cost of $25 and marginal cost of $15. Based on this information, if the firm were to increase production to 21 units, which of the following would occur? ) Marginal cost would decrease. b) Marginal cost would increase. c) Average total cost would decrease. d) Average total cost would increase. B) The government imposes a $1,000 license fee on all pizza restaurants. Which cost curves shift as a result? a) Average total cost and marginal cost. b) Average total cost and average fixed cost. c) Average variable cost and marginal cost. d) Average variable cost and average fixed cost