Please answer the questions of PART A in the table provided in the answer section. Any answers you indicate or give here in the question section will be disregarded and you will not receive marks for them.

1. When marginal cost curve is below an average cost curve, average cost is:

Select one:

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a. Decreasing with output.

b. Not varying with output.

c. Increasing with output.

d. None of the statements associated with this question are correct.

2. Joe likes to sleep late in the mornings and play tennis in the afternoons. The opportunity cost of Joe attending his morning class for one hour is:

### Select One:

a. An hour of tennis given up.

b. Nothing because he is paying for his class.

c. Both the tennis given up and the sleep given up.

d. An hour of sleep given up.

3. For the cost function C(Q) = 100 + 2Q + 3Q2, the average fixed cost of producing 2 units of output is:

Select one:

a. 50.

b. 2.

c. 3.

d. 100.

4. ________ are likely a fixed cost of a firm.

Select one:

a. Wages paid to employees

b. Travel expenses to meet with clients

c. Lease payments for office space

d. The payments for supplies

5. Economies of scale exist whenever long-run average costs:

Select one:

a. Remain constant as output is increased.

b. Increase as output is increased.

c. None of the other statements are correct.

d. Decrease as output is increased.

6. You are the manager of a firm that sells its product