Question 1 (34.5 points-1.5 points each)

3. ______ returns to scale occurs when the output increases by a larger proportion than the increase in inputs.
5. When the marginal costs curve is _____ an average cost curve the average cost curve is falling.
7. The integral of ________ cost equals total cost.
10. In a _______ equilibrium, demand equals supply.
12. A fixed regular payment earned for work or services.
13. A type of efficient allocation.
15. Two inputs capital and labor are perfect _________ in a production function if they enter as a sum.
18. With strictly convex preferences, an allocation is Pareto optimal if the indifference curves are _______ to each other.
19. ..... costs are business costs that are constant whatever the amount of goods produced.
20. Marginal cost of _______ is the incremental increase in total cost that results from one unit increase in capital.
21. A _________ firm produces the level of output in which marginal revenue equals marginal cost.
22. _______ is the rate at which a firm can substitute capital with labor.

1. The utility function U=max{x,2y} represents a _____ indifference curve.
2. ______ curve shows various combinations of inputs that cost the same total amount.
4. Economies of _____ occurs when more units of a good can be produced on a larger scale with fewer input costs.
6. __________ box that shows all feasible allocations in exchange economies.
8. The _____ welfare theorem states that the competitive equilibrium maximizes social efficiency.
9. Any Pareto efficent allocation should satify _______ constraint.
10. An inefficient allocation cannot be a _______ allocation.
11. Marginal ______ of labor is the change in output that results from employing an added unit of labor.
14. ______ curve is the set of tangency points between the indifference curves of the two consumers.
16. It equals marginal cost
17. Profit minus total cost.