1. Why can the distinction between fixed costs and variable costs be made in the short run? "There are no fixed costs in the long run; all costs are variable." Explain? Ans: _____________________ Classify the following as fixed or variable costs: a) advertising expenditures, b) fuel, interest on company-issued bonds, c) shipping charges, payments for raw materials, d) real estate taxes, e) executive salaries, f) insurance premiums, g) wage payments, h) depreciation and obsolescence i) charges, sales taxes, and rental payments on leased office machinery. (25 points) 2. The table below shows a car manufacturer's total cost of producing cars. Q TC TVC AVC AFC ATC MC 0 $500,000 1 540,000 2 560,000 3 570,000 4 590,000 5 620,000 6 660,000 7 720,000 8 800,000 9 920,000 10 1,100,000 a. For each level of output, calculate the total variable cost [TVC], the average variable cost [AVC], the average fixed cost [AFC], the average total cost [ATC], and the marginal cost [MC]. b. What is this manufacturer's fixed cost? Explain how you derived this. c. What is the minimum average cost output quantity? Explain how you derived this. d. a single, well-labeled diagram [ graphs] that shows the manufacturer's AVC, ATC, and MC curves. (50 points) Q3. Use the concepts of economies and diseconomies of scale to explain the shape of a firm's long-run ATC curve. What is the concept of minimum efficient scale? What bearing can the shape of the long-run ATC curve have on the structure of an industry