Question

assuptions of law of equimarginal utility​

Answer 1

Explanation:

Introduction

The fundamental problem in an economy is that there are unlimited human wants. However, there are no adequate resources to satisfy all human wants. Hence, a rational individual tries to optimize the available scarce resources in order to attain maximum satisfaction. An individual’s attempt to optimize the available scare resources is known as consumer’s behavior. The law of equi-marginal utility explains such consumer’s behavior when the consumer has limited resources and unlimited wants. Because of this reason, the law of equi-marginal utility is further referred to as the law of maximum satisfaction, the principle of income allocation, the law of economy in expenditure or the law of substitution.

What does the law say?

Suppose that a person possesses $200 (limited resources). However, his wants are unlimited. The law explains how the person allocates the $200 among his or her various wants in order to maximize the satisfaction. The point at which the consumer’s satisfaction is maximum with the given resources is known as consumer’s equilibrium. Hence, we can say that the law explains how the consumer’s equilibrium is attained. The law is basically a cardinal utility approach.

Concept of Equi-marginal Utility

Now let us see how an individual maximizes his or her satisfaction with the help of equi-marginal utility. The law says that in order to attain maximum satisfaction, an individual allocates the resources in such a way that he or she derives equal marginal utility from all things on which the resources are spent. For instance, you have $100 and you spend the money to buy 10 different things. What the law says is that you spend money on each thing in such a way that all the 10 things provide you with the same amount of marginal utility. According to the law of equi-marginal this is the way to attain maximum satisfaction.

Answer 2

Answer:

i dont have ans sorry

Explanation: