A consumer is in equilibrium when he buys commodities X and Y.
When price of X falls, he starts buying more of X than Y.

True

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False

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Solution

The correct option is A True
When the price of X falls then the ratio of marginal utility of X and it's price decreases in comparison to the marginal utility of money. Therefore, consumer starts consuming more of X in order to decrease its marginal utility and equate the equation to equilibrium again.

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A consumer is in equilibrium when he buys commodities X and Y. When price of X falls, he starts buying more of X than Y.

A consumer is in equilibrium when he buys commodities X and Y.
When price of X falls, he starts buying more of X than Y.