Explain if the following statements are true or false.

1. Whenever a firm's average variable costs are falling as output rises, marginal costs must be falling too. (2 points)
2. Whenever a firm's average total costs are rising as output rises, average variable costs must be rising too. (2 points)
3. Assume a computer firm's marginal costs of production are constant at $1,000 per computer. However, the fixed costs of production are equal to $10,000.

a. Calculate the firm's average variable cost and average total cost curves. (2 points)

b. If the firm wanted to minimize the average total cost of production, would it choose to be very large or very small? Explain. (2 points)