Question

6. Mr. Jital Singh is consuming two goods X and Y, if he is facing situation of Mu x > Mu y /p x >p y
what he should do?
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Answer 1

Answer:

If MUx/Px > MUY/PY marginal utility derived by spending one rupee on consumption of commodity X is greater than the marginal utility derived by spending one rupee on consumption of commodity Y. The satisfaction derived by consuming Commodity X is greater than the satisfaction derived by consuming Commodity Y. Mr. Atal Singh will reallocate his income by spending more on commodity X as he will consume more units of commodity X marginal utility derived from consumption of commodity X diminishes and alternate preposition occurs for Commodity Y this process will continue till MUx/Px becomes equal to MUY/PY.