Question

A situation when Px/Py is better than when Px/Py = MUx/MUy . ​

Answer 1

Answer:

False

Reason

A consumer attains his equilibrium only when Px / Py = MUx / MUy . It is a situation of Maximum satisfaction . Any other situation will not yield maximum satisfaction

Answer 2

hey mate...

here is your answer...

When MUx/Px will be greater than the MUy/Py, then it means that the consumer is deriving more satisfaction from the commodity X. So he will spend more of his income on consumption of that commodity. He will sacrifice more of Y to gain an additional unit of Y. Now according to law of DMU his MU from each successive units of X will keep on diminishing until it reach a point when MUx/Px = MUy/Py

hope it helps...