Problem
1. Suppose a firm hat a cost function C(q) = 4q^2 + 16.
a. Find its variable cost, fixed cost average total cost, average fixed cost, average variable cost.
b. Find the output level that minimizes average total cost and corresponding value of average total cost (ATC) where marginal cost is 8q (MC = 8q).
2. If the algebraic expression relating income to expenditure is shown as I = P_x X + P_y Y, show, using simple algebra or graphical representation, that the slope of the budget line is -P_x/P_y if good X is on the horizontal axis.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.