EFM Paper 1

3. A Small incremental adjustment to a plan of action is called ______.
4. As the number of workers increases, the marginal product decline, and the production function becomes ______.
7. The Average ______ cost curve is U-Shaped.
8. For low levels of quantity supplied, the elasticity of supply is _____.
11. More output is sold, so Q is higher which tends to increase the total revenue, is the _______ effect.
16. _______ conclusions cannot come from positive analysis alone, they involve value judgments as well.
17. Total Revenue - Total Explicit cost = ________
18. Fixed cost of land is said to be a ______ cost.

1. Losses encourage exit, and exit shifts the demand curve of the remaining firms to the _______.
2. Goods with close substitutes tend to have ____ elastic demand.
3. A _______ causes deadweight losses.
5. A change in the good's price represents a movement _____ the supply curve.
6. ______ is the amount a seller is paid minus the cost of production.
7. ________ = Value to buyers - Cost to sellers.
9. Input cost that do not require an outlay of money by the firm are the _____ costs.
10. A perfectly competitive firm faces a _______ demand curve.
12. The _______ schedule is derived from the willingness to pay.
13. ______ are the instrument with which the invisible hand directs economic activity.
14. Firms are earning _____ profit, so price equals the minimum of average total cost.
15. A monopoly's marginal revenue curve lies ______ its demand curve.