Question

A consumer consumes only two goods
X and y whose Prices are rs 2 and
rs 1 per unit respectively if the consumerchooses da combination of the two good with marginal utility of X being 4 and that y also being 4 is the consumer in equilibrium ? Give reasons. Explain what I will a rational consumve do in this situation des marginal utility analysis​

Answer 1

Answer:

According to the utility approach, a consumer reaches equilibrium where the following equality is met. 

PxMUx=PyMUy

According to the given question 

PxMUz=24

PyMUy=11

So, PyMUy is greater than PxMUx. Thus, to reach the equilibrium, a rational consumer would increase the PxPy of good x. 

Hope,It is Useful...