True/False/Uncertain Questions [20 pts] Instructions: Explain your answer as most marks awarded for explanation and not the answer. Answers with no explanation will receive 0 marks. 1. (5 points) [VF] Suppose a firm in a perfectly competitive market has a producer surplus of $750, that means that their profits will also be $750. 2. (5 points) [VF] In problem set #6, we discussed the idea of homegeneity. For a consumer's demand function the homogeniety is of degree zero, i.e. qx(gP,gY) = g"qx(P, Y) where P is prices and Y is income. 3. (5 points) [VF] If the government imposes a per unit tax of T = $?5, then the equilibrium quantity, q must decrease. 4. (5 points) [VF] For a given level of output q, a firm's long-run average costs are always lower than its short-run average variable costs