Question

Solve MUx=25 ,Px=5, MUy=30 ,
Py=5 ,is the consumer in a state of equilibrium

Answer 1

Answer:

The equilibrium is struck when: MUx/ Px=MUy/Py=MUm. Substituting the value , 20/4=25/5 = 5. Implying,the consumer is in state of equilibrium.

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Answer 2

The consumer is not in a state of equilibrium.

Given,

MUx = 25

Px = 5

MUy = 30

Py = 5

To Find,

Is the consumer in a state of equilibrium =?

Solution,

In the state of equilibrium, we know that

MUx/Px = MUy /Py  

Putting the values given in the question, we get

25 / 5 = 30 / 5

5 = 6

We know that 5 is not equal to 6

5 ≠ 6

LHS ≠ RHS

Hence, the consumer are not in a state of equilibrium