1. (12 points) Draw and fully label the 4 per unit cost curves and the MR curve. On your graph indicate the following points: a) the point of diminishing returns, b) the production level where profit is maximized, c) the break-even cost level in the short run, d) the break-even cost level in the long run, e) the start of stage II, and f) the point of lowest per unit cost of production in the long run. 2. (10 points) a) Show graphically (after labeling fully) how the utility maximizing combination of goods is determined. b) Show what happens to the budget line if the Pg1 decreases. c) Show and label the new utility maximizing combination of goods if the consumer stays on the new budget line. d) Is the consumer better off, worse off, or the same? Why? (be specific) 3. (6 points) Using the indifference curves, a budget line and a price change, show how we can derive an individual's demand curve for a product