12th Class Economics Solved Paper - Economics 2016 Outside Delhi Set-I

A consumer consumes only two goods X and Y. Marginal utilities of X and Y are 3 and 4 respectively. Prices of X and Y are Rs 4 per unit each. Is consumer in equilibrium? What will be further reaction of the consumer? Give reasons.

Answer:

For equilibrium \[\frac{M{{U}_{x}}}{Px}=\frac{MUy}{Py}\]

Marginal utility of \[X=3\]

                Price of X = Rs. 4

Marginal Utility of \[Y=4\]

                Price of Y = Rs. 4

           \[\frac{M{{U}_{x}}}{Px}=\frac{MUy}{Py}\]

                \[\frac{3}{4}\,\,=\,\,\frac{4}{4}\]

Since            \[\frac{M{{U}_{x}}}{Px}=\frac{MUy}{Py}\]

Hence Consumer is not in equilibrium

To reach equilibrium level, consumer should decrease the consumption of good X.

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12th Class Economics Solved Paper - Economics 2016 Outside Delhi Set-I

question_answer A consumer consumes only two goods X and Y. Marginal utilities of X and Y are 3 and 4 respectively. Prices of X and Y are Rs 4 per unit each. Is consumer in equilibrium? What will be further reaction of the consumer? Give reasons.

A consumer consumes only two goods X and Y. Marginal utilities of X and Y are 3 and 4 respectively. Prices of X and Y are Rs 4 per unit each. Is consumer in equilibrium? What will be further reaction of the consumer? Give reasons.