Question

3. In case of MUX > MUY
Px Py :
Consumer will shift some expenditure from x to y
Consumer will shift some expenditure from y tox
Consumer will spend less on both X and Y
Consumer will spend more on both X and Y
4. Utility refers to:
Excess capacity of a commodity
Want satisfying capacity of a commodity
Demand and capacity of a commodity
None of these
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Answer 1

Answer:

If MRS < Px/Py, the consumer will consume less x and more y. If MRS = Px/Py, the consumer will not change their consumption. Recall that ...