Question 1 (34.5 points-1.5 points each)

2. Any Pareto efficent allocation should satify _______ constraint.
4. _______ is the rate at which a firm can substitute capital with labor.
6. Marginal ______ of labor is the change in output that results from employing an added unit of labor.
7. ______ curve is the set of tangency points between the indifference curves of the two consumers.
10. Profit minus total cost.
14. A _________ firm produces the level of output in which marginal revenue equals marginal cost.
15. __________ box that shows all feasible allocations in exchange economies.
17. The integral of ________ cost equals total cost.
18. Two inputs capital and labor are perfect _________ in a production function if they enter as a sum.
19. When the marginal costs curve is _____ an average cost curve the average cost curve is falling.
20. Marginal cost of _______ is the incremental increase in total cost that results from one unit increase in capital.

1. With strictly convex preferences, an allocation is Pareto optimal if the indifference curves are _______ to each other.
2. ..... costs are business costs that are constant whatever the amount of goods produced.
3. The _____ welfare theorem states that the competitive equilibrium maximizes social efficiency.
5. An inefficient allocation cannot be a _______ allocation.
6. A type of efficient allocation.
8. In a _______ equilibrium, demand equals supply.
9. Economies of _____ occurs when more units of a good can be produced on a larger scale with fewer input costs.
11. The utility function U=max{x,2y} represents a _____ indifference curve.
12. A fixed regular payment earned for work or services.
13. ______ curve shows various combinations of inputs that cost the same total amount.
16. ______ returns to scale occurs when the output increases by a larger proportion than the increase in inputs.
18. It equals marginal cost