Just Answer Question 2 and 4 only!

Question 2) For Simon's pizza house, explain whether each of the following is a xed cost or a variable cost in the short run. a. The payment he makes on his building insurance policy I). The payment he makes to buy pizza dough e. The wages he pays his workers :21. The lease payment he makes to the landlord who owns the building where his store is located e. The $3 00 per month payment he makes to his local newspaper for rlmnjng his weekly advertisement Question 3) Oscar runs a small coffee shop close to Glenferrie station. In the short run, Oscar will not have the funds to upgrade his coffee shop with new additional machines and equipment. The table below shows how the quantity of coffees he can sell per day depends on the number of staff he hires. Oscar pays each staff $200 per day. The shop's rent is $2,100 per month; or $70 per day. For simplicity purposes, assume wages and rent are the only two costs in Oscar's daily business Quantity Quantity Fixed Variable Total Average Marginal of staff of coffees Cost Cost Cost Total Cost Cost made "Rent) (Wage) 0 0 $70 0 $70 30 $70 $200 $270 70 $70 $400 $470 130 $70 $600 $670 170 $70 $800 $870 200 $70 $1.000 $1,070 a. Calculate Average Total Cost and fill in the table above b. Calculate Marginal Cost and fill in the table above c. For the first three employees, marginal cost keeps decreasing. However, from employee number 4, marginal cost begins and continues to rise. Clearly explain why it is the case. Question 4) Based on the data in Question 3 above, answer the following: a. Graph the Marginal Cost (MC) curve and the Average Total Cost (ATC) curve on a diagram. Remember to label the curves and the axes fully. b. State clearly the relationship between Marginal Cost and Average Total Cost