Economics Principle's Practice Quiz Part 2. QUESTION 1 3. Why is it important to differentiate between explicit and implicit cost? b, Why is it important to differentiate between the short and long run? Which business has a shorter short run, a bakery, or a metal smelting business? Explain c. Classify the following costs as explicit or implicit. Explain your answer - ABC Company spent $1000 for coffee and biscuits for their staff. - Jim used $50000 from his savings account to buy a car for his business - BHP paid interest on company issued bonds 0 Frank spends 4 hours every weekend cleaning his office QUESTION 2 a. Use a numerical example to illustrate and explain the concept of the marginal product of labour. b, If labour is the only variable input, explain how changes in the marginal product of labour affects marginal returns and marginal cost. c. Use graph (5), illustrate, and explain the relationship between marginal cost and average total cost. d. Ceteris Paribus, at which stage ofthe marginal and average total cost relationship, will a firm's profit decline. Use the profit equation to explain your reason. QUESTION 3 3. Explain with the support ofgraph(s) the demand, marginal revenue, average revenue, and total revenue curves of a monopolistic firm. b. Graph and explain the difference in the demand curve of a monopoly and a monopolistic firm. c. Graph and explain the concept of normal profit. In your answer, explain why normal profit is a key requirement forfirms wanting to remain in business in the long run? d. Why is a perfectly competitive market structure very unlikely to exist in the real world? e. Which market share most of the characteristics of a perfectly competitive market? Explain. QUESTION 4 Frank owns a caf and his total revenue is not sufficient to cover his average total cost. What are Frank's options in the short run