Question

1 explain the conditions of consumer equilibrium with the help of marginal utility analysis?
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2 explain cardinal and ordinal approach or concepts of utility with examples?

Answer 1

1 . A consumer strikes his equilibrium when rupee worth of marginal utility actually received by the consumer is equal to marginal utility of money ( rupee worth of satisfaction that the consumer wishes to get ).
MUx/Px =MUm

2. Cardinal measurement of utility refers to the measurement of utility in terms of units 2,4,6and 8.

ordinal measurement of utility refers to the measurement of utility in terms of some ranks like high or low.

Answer 2

Answer:

Explain the conditions of consumer's equilibrium with the help of marginal utility analysis. ... Likewise, if P(of X) is greater than MU(in terms of money), the consumer will be prompted to buy less of good X, leading to a fall in MU. Condition 2: Marginal utility of money remains constant.