Question

2) Statments indicating consumer equilibrium
y
a) MU is greater than price
b) MU is equal to price
c) MU is less than price
d) Price is less than one
Options :
i) a and b
ii) a, b, c and d
iii) a, b and c
iv) only b​

Answer 1

Answer:

ans: only b

Explanation:

According to the law of equi-marginal utility a consumer will be in equilibrium when the ratio of marginal utility of a commodity to its price equals the ratio of marginal utility of other commodity to its price. MUx/Px= MUY/PY= MU of last rupee spent on each good, or simply MU of Money.