Question

Mr. X consumes two goods X and Y whose prices are Rs 60 and Rs 30 per unit

respectively. Which of the value of Marginal Rate of Substitution states that, the

consumer is in equillibrium? (choose the correct alternative)a. 6

b. 4

c. 2

d. 5​

Answer 1

Given: two goods X and Y whose prices are Rs 60 and Rs 30 per unit

To find: value of Marginal Rate of Substitution

Explanation:

A consumer in consumption of two commodities is at equilibrium when

   $MRS_{XY}$ = $\frac{P_{X} }{P_{Y} }$

Putting the given values in the equilibrium condition:

  $MRS_{XY}$ = $\frac{60}{30}$

  $MRS_{XY}$ $= 2$