Question 1 (34.5 points-1.5 points each)

2. When the marginal costs curve is _____ an average cost curve the average cost curve is falling.
8. Marginal cost of _______ is the incremental increase in total cost that results from one unit increase in capital.
9. With strictly convex preferences, an allocation is Pareto optimal if the indifference curves are _______ to each other.
14. Any Pareto efficent allocation should satify _______ constraint.
16. ______ curve is the set of tangency points between the indifference curves of the two consumers.
18. A fixed regular payment earned for work or services.
19. A type of efficient allocation.
20. ______ curve shows various combinations of inputs that cost the same total amount.
21. Two inputs capital and labor are perfect _________ in a production function if they enter as a sum.
23. ..... costs are business costs that are constant whatever the amount of goods produced.

1. Marginal ______ of labor is the change in output that results from employing an added unit of labor.
3. __________ box that shows all feasible allocations in exchange economies.
4. In a _______ equilibrium, demand equals supply.
5. It equals marginal cost
6. The integral of ________ cost equals total cost.
7. ______ returns to scale occurs when the output increases by a larger proportion than the increase in inputs.
10. The utility function U=max{x,2y} represents a _____ indifference curve.
11. Profit minus total cost.
12. An inefficient allocation cannot be a _______ allocation.
13. The _____ welfare theorem states that the competitive equilibrium maximizes social efficiency.
15. _______ is the rate at which a firm can substitute capital with labor.
17. A _________ firm produces the level of output in which marginal revenue equals marginal cost.
22. Economies of _____ occurs when more units of a good can be produced on a larger scale with fewer input costs.