1. Consider the following cost function:

TC=46+8q+12q⁶

where TC is total cost of production and q is quantity produced. Please identify the average fixed cost, the average variable cost and the marginal cost.

2. Consider the following cost function:

TC=46+8q

where TC is total cost of production and q is quantity produced.

Assume the price to be $25. What is the "Break-even quantity" for the firm?

3. You are indifferent (derive the same utility) between the following investments:

a. An investment with a sure return of 100 $

b. An investment with an expected outcome of 200$ and standard deviation of 20$

c. An investment with an expected outcome of 350$ and standard deviation of 40$

If you drew an indifference curve between risk and return, how would it look like? What does it say about the nature of your risk aversion?

4. Please create a numerical example and show the relationship between opportunity costs and comparative advantage in trade. Is it ever possible for a party to have neither absolute nor comparative advantage? What would the opportunity costs look like? Use a numerical example to explain.