In perfect and monopolistic competition, there are many firms in a market. The correct answer is C.

For a perfectly competitive firm, the profit maximizing condition can be written as follows:
MR = MC = P

The correct answer is D. 

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.

Price elasticity of demand is also affected by how the consumers view a good or service a necessity or luxury for themselves. Necessities tend to have inelastic demand and luxuries tend to have elastic demand. Education and health services (doctor visits), heating in the winter, gasoline for car owners are considered necessities for consumers and these items have inelastic demand since the case of price increases in these items gets small reactions from consumers to cut their quantity demanded. On the other hand, for the items that is considered as luxury for the consumers, a price increase gets a substantial response from the consumers’ demand. The correct answer is B.

We can define the necessary conditions for a competitive industry as follows:

 i) There are many firms; a single firm produces and sells a tiny fraction of the total market sold to many consumers; a single consumer`s purchase is also a tiny fraction of the total market purchase.

 ii) Producers and consumers are well informed about the quality and price of the good in question.

iii) Firms produce and sell an identical product.

iv) There are no restrictions on entry into (or exit from) the market, and established firms don`t have any specific advantage over new firms.

On the other hand, as the producers and consumers are price takers, neither can influence the market price of the product. The correct answer is B.

If demand is elastic, that is, elasticity is greater than unity in absolute value, then a percentage increase in the price will decrease the quantity sold more than a percentage and the total revenue will fall.

There are five properties of indifference curves: a) more goods are preferable to fewer goods, b) goods are substitutable, c) indifference curves cannot cross each other, d) indifference curves are everywhere dense, and e) indifference curves are always convex. The correct answer is A.

If the demand curve for labor supply shifts right, it means there is labor supply. Immigrants have a positive effect on labor supply. Therefore, the correct option is A.

The Land includes not only the physical area that the production facilities are built upon, but also other natural resources, such as coal that are used in production.

The basic factors of production available to a society are natural resources, labor, capital and entrepreneurship. Therefore, the correct option is B. 

Total Cost (TC) = Wage (w) x Labor (L) + Interest (r) x Capital (K) The correct answer is A.

The basic factors of production available to a society are natural resources, labor, capital and entrepreneurship. Money is not one of them.

Profit is defined as the difference between total revenue and total cost. The correct answer is C.

Budget constraint (or budget line) shows all of the combinations of the quantities of goods X and Y that a consumer can buy with his fixed level of income. The correct answer is B.

Economic efficiency is the use of scarce resources—the labor force, natural resources and land—that will yield the highest possible amount of output or the production of what people demand using the least amount of input. Therefore, the correct option is A.

There is continuous interaction between the actions of firms and households in a market
economy. These actions affect (even determine) market prices, and get affected by changes in those prices. Prices are the best and most effective signals guiding the decisions of households (or consumers) and firms (or producers).

When the demand is elastic (If we are on the elastic portion of demand curve), then
Price elasticity of demand is greater than 1.  Percentage change in Quantity>Percentage change in Price. The decrease in total revenue from lower Quantity is greater than the increase in total revenue from higher Price, so total revenue from sales falls. Answer is D.

The relationship between the factors of production that a firm uses and the output it produces is called a firm’s production function. A typical production function can be expressed as: Q = TP = f (K, L, N) Here, Q stands for Quantity Output and TP stands for Total Product. When talking about production, these two terms can be used interchangeably. K means physical capital, L means labor and N means land (or natural resources). The correct answer is C.

In many cases, firms sell the same good to different customers at different prices. This practice is called price discrimination. Therefore, the correct option is B.