Question 1 (1.5 points each)

5. Profit minus total cost.
8. Two inputs capital and labor are perfect _________ in a production function if they enter as a sum.
10. With strictly convex preferences, an allocation is Pareto optimal if the indfiference curves are _______ to each other.
11. Economies of _____ occurs when more units of a good can be produced on a larger scale with fewer input costs.
13. Marginal ______ of labor is the change in output that results from employing an added unit of labor.
15. A _________ firm produces the level of output in which marginal revenue equals marginal cost.
16. Any Pareto efficent allocation should satify _______ constraint.
18. An ______ returns to scale occurs when the output increases by a larger proportion than the increase in inputs
19. An inefficient allocation cannot be a _______ allocation.
20. ..... costs are business costs that are constant whatever the amount of goods produced.
21. A fixed regular payment earned for work or services.
22. ______ curve is the set of tangency points between the indifference curves of the two consumers.

1. A type of efficient allocation.
2. The _____ welfare theorem states that the competitive equilibrium maximizes social efficiency.
3. _______ is the rate at which a firm can substitute capital with labor.
4. Marginal cost of _______ is the incremental increase in total cost that results from one unit increase in capital.
6. A type of box that shows all feasible allocations in exchange economies.
7. In a _______ equilibrium, demand equals supply.
9. Equals marginal cost
12. The utility function U=max{x,2y} represents a _____ indifference curve.
14. When the marginal costs curve is _____ an average cost curve the average cost curve is falling.
15. The integral of ________ cost equals total cost.
17. ______ curve shows various combinations of inputs that cost the same total amount.