MCQ #1 of Managerial Economics Video

Under competitive conditions, the industry will be in equilibrium
A: When each firm is in equilibrium equating MC with MR
B: When all the firms are earning only normal profits
C: When firms outside have no tendency to enter the industry and those within, have no tendency to leave the industry
D: When all the three conditions are fulfilled.

If the MUx/MUy for individual A is greater than the MUx/MUy for individual B, it is possible for individual A to gain by giving up
A: Y in exchange for more X from B
B: Y in exchange for more X from A itself
C: Y in exchange for less X from B
D: X in exchange for less y from A.

One common definition of luxury goods is goods with an income elasticity
A: Greater than one
B: Equal one
C: Less than one but more than zero
D: None of these

A demand curve which takes the form of a horizontal line parallel to the quantity axis illustrates elasticity which is
A: less than 1
B: greater than 1
C: Infinite
D: Zero

Supply of a commodity is a
A: Stock concept
B: A flow concept
C: Both stock and flow concept
D: None of these



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