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

Explanation:

A consumer consumes only two goods X and Y whose Prices are Rs. 5 and Rs.4 respectively. If the consumer chooses a combination of the two goods with marginal utility of X equal to 4 and that of Y equal to 5, is the consumer in equilibrium ? Why or why not ? What will a rational consumer do in this situation ? Use utility analysis.