Question

A consumer consumes only two goods X and Y whose prices are ₹ 5 and ₹ 4 per unit respectively. If MUY = 16 at the point of consumer’s equilibrium, Calculate MUx. ​

Answer 1

Answer:

MUx = 20

Explanation:

Px = ₹5 , Py = ₹4

MUy = 16

A consumer will be in equilibrium when:

$\frac{mux}{px} = \frac{muy}{py }$

$\frac{mux}{5} = \frac{16}{4}$

$mux \: = \frac{16 \times 5}{4}$

$mux = \frac{80}{4}$

$mux = 20$