Answer to Question 1
The optimal scale of plant is the scale of plant that minimizes long-run average cost.
Answer to Question 2
Indifference curves are convex because of diminishing marginal utility. When a consumer has a large amount of good Y (and a small amount of good X), he will be willing to give up a great deal of good Y to receive a little more of good X. However, if the individual has only a small amount of good Y and a large amount of good X, he will not be very willing to give up good Y to receive more of good X.