Answer the questions below

Problems 1) Discuss each of the following statements. Decide whether the statement is true or false and then justify your answer. a. As output increases, if average total cost is decreasing, then marginal cost must be less than average total cost. b. As output increases, if average total cost is increasing, then marginal cost must be greater than average total cost. c. As output increases, if marginal cost is greater than average fixed cost, then average fixed cost must be increasing. d. As output increases, fixed cost decreases. e. As output increases, variable cost increases.5) For each of the following costs, decide whether it is a fixed cost or a variable cost for the firm in the short run. Provide a brief argument for your classification of the cost. a. A one-year lease on the building in which the business is located. b. Annual property taxes that are assessed on the value of the land the business owns. c. The cost of a necessary metal used in the production of the firm's product. d. A ten-year-old metal stamping machine that has a useful life of twenty years in your business and is sufficient to produce any desired level of output for the firm. e. Sugar that the firm uses to make the cookies it sells.6) The following table provides some information about Stella's Delight, a business that Stella owns. Stella uses labor and capital as her only inputs in the production of her product. a. Fill in the table below. Quantity Quantity MC of labor of capital Quantity VC FC AVC AFC ATC (S per unit (units) (units of output (S) (S) ( S ) (S) of output) 0 5 0 5 10 2 5 18 10 3 5 24 15 4 28 5 5 30 6 5 31 b. What is the price of the variable input? c. What is the price of the fixed input? Section 10 | Behind the Supply Curve: Profit, Production, and Costs 137 d. What is the marginal product of the fifth unit of labor? e. What is the marginal cost of producing the twenty-fourth unit of output?11) In October, Marissa paid an annual subscription fee of $600 to the local opera company for this season's five opera performances. This fee is nonrefundable and entitles Marissa to one ticket to each of the five performances. A friend of Marissa's invites Marissa to an all-expense paid weekend to Miami. Marissa discovers that the weekend her friend invites her to Miami is the same weekend as the first opera performance. Marissa estimates that the value of the trip to Miami is $1,000. a. Marissa is trying to figure out the cost of going to Miami. Since she will miss the opera, she calculates that the cost of her going to Miami is $120 or the cost of one ticket to the opera. Do you agree with Marissa's reasoning? Explain your answer. b. With respect to the opera, her friend says that the cost of going to Miami is $0 for Marissa, since whether she goes to the opera or not she will not get her $120 back. Do you agree with this reasoning? Explain your answer. b. Marissa's roommate says that Marissa's cost of going to Miami is $1,120, since it should include the cost of the trip ($1,000) plus the cost of the missed opera performance ($120). Do you agree with this reasoning? Explain your