If the output increases by the same percentage as the increase in all inputs, this is named constant returns to scale. The correct answer is D.

Oligopoly is a market structure with few firms. Each firm in the market produces a large share of the total market quantity and hence can influence the market price.

Total utility: The total satisfaction you derive from consumption; this could refer to either your total utility of consuming a particular good or your total utility from all consumption.

Everyone has to give up something in order to get one thing that she wants. In other words, there is a “price” for everything we get even when no money changes hands.

The opportunity cost of a desired item or outcome to a person is what that person has to give up to get that item or to achieve that outcome. When making decisions, individuals should recognize the opportunity costs of each action that they can take. The answer is E.

The total cost is the economic cost of all the resources, including the cost of entrepreneurship which is called normal profit. To keep the analysis simple, however, we have assumed the firm uses only two resources, labor (L) and a given amount of capital (K), in the short run. The production technology is represented by the following production function:

 Q = f (L, K)

Total Cost (TC) The total fixed cost plus the total variable cost.

Marginal Product of Labor

Marginal Product of Labor (MPL) is the additional output produced when a small amount of additional labor is employed with all other inputs remaining the same. More formally, it is the ratio of change in total product to the change in the amount of labor used.

Sunk Cost: an expenditure that was incurred in the past and is irreversible in the short-run. Therefore, the correct option is B.

Monopolistic competition differs from perfect competition because the products sold in monopolistic competition are slightly differentiated. Therefore, the correct option is D.

Balancing Choices and Scarcity: Subject Matter of Economics

Economics is the study of how individuals and societies choose to use scarce resources at their disposal. The needs and desires of individuals are unlimited. Satisfying those needs and desires requires the production of goods and services. All the goods that are not sufficiently abundant to be available to everyone for free are said to be scarce. Their scarcity follows from the scarcity of resources we use to produce them. If scarcity of resources were not a problem, it would be possible to produce all goods and services in sufficiently large quantities to make them available to everyone for free. This is not possible because material inputs and factors of production needed to produce goods are not available in unlimited quantities. The economic problem arises because of this scarcity.

Because a firm cannot change the amounts of its fixed inputs used in the short run, it has to use more of its variable inputs to increase production. That means that the firm has to pay more for variable inputs to increase output. The sum of all variable costs a firm pays for variable inputs is called the total variable cost (TVC). Since labor is the only variable input for our representative firm, its total variable cost will be the wage rate times the amount of labor used. Thus the formula would be this: Total Variable (TVC) = Wage (w) x Labor (L). The correct answer is B.

A monopolist is the only producer in the market. It faces the market demand curve and hence has to reduce price to sell more units. As a result; its marginal revenue from the last unit sold is less than the price of that unit. Profit maximizing level of output for a monopolist is the output level where the MR is equal to MC and at the same time P>MR=MC.

Indifference curves cannot cross each other.

The Average cost (AC) tells us the cost per unit. It is equal to the total cost divided by the amount of output produced. The correct answer is A.

A market, whether a physical place or a Web site, not only brings people together but also enables contact among people, thus creating a social relation. The correct answer is E.

(7347839-7349872)/(11-10)=-2033

Additional worker decreases productivity

The net present value of an asset expected to last for t years can be calculated by the following formula: 

Here, P_p stands for the purchasing price of an asset, NR is the difference between the revenue received from an asset and the operating costs per period, P_s is the selling price of an asset and i is the annual interest rate.

Therefore the machine's net present value will be calculated as NPV=-8000+[(10000-4000)/(1+5)] = - 7000

The answer is B.

The effect of an increase in interest rates on saving is ambiguous. An increase in interest rates causes saving to increase due to substitution effect but to decrease due to income effect. Since both effects work in opposite directions, the total effect is ambiguous. The answer is B.

The determinants of the capital demand are the price have to be paid to obtain the capital good, the marginal revenue product received by having it, the operating costs of it, the price we could receive eventually by selling the same machine and the interest rate. The answer is D.