Question

Practicals on Consumer's Equilibrium (Two Commodities)
ne MU schedule for goods X and Y are given. Price of both the goods is 1 each and the income
Ramesh (an individual) is assumed to be 55. Determine, how many units of both the commodities
ould be purchased by Ramesh to maximize his total utility. What is the total amount of utility received
Ramesh at the point of equilibrium?​

Answer 1

Answer:

A consumer always strives to attain equilibrium. In the absence of any price, we can take it as 0. so, the consumer will consume up to that unit at which his marginal utility is 0

Explanation:

Therefore, we can say that consumers equilibrium is achieved when the price line is tangential to the indifference curve. Or, when the marginal rate of substitution of the goods X and Y is equal to the ratio between the prices of the two goods.