Question: Define or explain what the following concepts mean:

(a) Homogeneous production function.

(b) Given production function f(x₁, x₂), define MP₁ (x) and TRS₂₁(x).

(c) Consumer Surplus (given demand function D(p))

(d) Producer Surplus (given supply function S(p))

(e) Compensating Variation

(f) Equivalent Variation

(g) Price Elasticity of Demand

(h) Elastic and Inelastic Demand

(i) Natural Monopoly

(j) Monopolistic Competition

(k) Average Cost pricing for a monopolist

(1) Pareto Efficiency (PE)

(m) First, Second, and Third degree price discrimination

(n) Two part tariff

(o) Externality

(p) Best response.

(q) The three elements that define a game (in strategic form)

(r) Nash equilibrium

(s) Dominant strategy