A budget surplus occurs when government tax revenue exceeds its spending. This surplus represents public saving, which adds to the total supply of loanable funds in the economy. When the supply of loanable funds increases, the supply curve shifts to the right. Given a downward-sloping demand curve for investment, this rightward shift in supply leads to a lower equilibrium real interest rate, making it cheaper for private firms to borrow for investment purposes.

Accounting profit is calculated by subtracting only explicit costs from total revenue. Economic profit, however, subtracts both explicit and implicit costs. Since implicit costs represent the opportunity cost of resources owned by the firm, they are positive values. Therefore, subtracting both types of costs results in a lower economic profit compared to accounting profit, meaning accounting profit will always exceed economic profit.

Marginal cost represents the change in total cost for an additional unit of output. If marginal cost is positive, total cost must be increasing. If marginal cost is falling, the increments added to the total cost are getting smaller, meaning the total cost curve is concave or increasing at a decreasing rate.

Average Variable Cost (AVC) is defined as the variable cost per unit of output. It is calculated by dividing the total variable cost (TVC) by the total quantity of output (q) produced. This metric helps firms understand the variable cost component of their production process, which is crucial for short-run decision-making, such as determining whether to continue production or shut down.

Average fixed cost (AFC) is determined by dividing the total fixed cost (TFC) by the total quantity of output (q). Because fixed costs do not change with the level of production, the average fixed cost curve slopes downward as output increases, representing the spreading of fixed expenses over a larger number of units produced.

The efficient scale of production is defined as the output level where the average total cost (ATC) is at its minimum. At this point, the firm is utilizing its resources in the most cost-effective manner, as any increase or decrease in production would result in a higher average cost per unit.

In the short run, total costs are composed of total fixed costs and total variable costs. Since fixed costs remain constant regardless of output, any change in total cost as output changes is driven entirely by changes in total variable costs. Therefore, both total variable costs and total costs are functions of the output level.

Fixed assets, also known as property, plant, and equipment (PP&E), are long-term assets that a company uses in its production process. These assets are not intended for immediate resale and provide economic benefits to the firm over multiple accounting periods, such as machinery, buildings, and land.

Average cost (AC) is Total Cost divided by Output. Initially, AC = 500/20 = 25. After the change, AC = 600/30 = 20. The average cost actually falls from 25 to 20. Since the provided answer key indicates 'B', there is a conflict between standard economic calculation and the provided key.

Normal profit occurs when total revenue equals total economic costs, which include both explicit and implicit costs (opportunity costs). In this state, the firm is covering all its costs, including the opportunity cost of the resources used, but is not earning any excess or supernormal profit. It is the minimum level of profit required to keep the firm in business.