A situation when PX-PY - MUX-MUY is better than when PX-PY - MUX-MUY-

The correct option is B FalseThe ideal situation is of equilibrium which occurs #160;when consumer equates #10;the ratio of marginal utility derived from o ...

A situation w...

Question

A situation when $\frac{P_{X}}{P_{Y}} > \frac{M U_{X}}{M U_{Y}}$ is better than when $\frac{P_{X}}{P_{Y}} = \frac{M U_{X}}{M U_{Y}}$ .

True

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False

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Solution

The correct option is B False
The ideal situation is of equilibrium which occurs when consumer equates the ratio of marginal utility derived from one commodity in comparison to it's price with the ratio of the marginal utility of another commodity in comparison to it's price.

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Similar questions

Q. If the value of MUx/Px is more than MUy /Py, then the Consumer ________.

Q.
A consumer strikes his equilibrium when

M U_{X} = M U_{Y} = M U_{M}

, in case of two commodities, and when

P_{X}

and

P_{Y}

are not equal.

A consumer, Mr. Aman is in state of equilibrium consuming two goods X and Y, with given

prices Px and Py. Explain what will happen if:

a. MUx / Px is greater than MUy / Py.

b. Py falls

Q. Initially

\frac{M U_{X}}{P_{X}} = \frac{M U_{Y}}{P_{Y}}

. With a fall in the price of Y, the consumption of the commodity-Y:

Q.
If

\frac{M U_{X}}{P_{X}} > \frac{M U_{Y}}{P_{Y}}

MUXPX>MUYPY, the consumer should buy more of commodity-Y and less of commodity-X.

A situation when PXPY>MUXMUY is better than when PXPY=MUXMUY.

The correct option is B FalseThe ideal situation is of equilibrium which occurs when consumer equates the ratio of marginal utility derived from one commodity in comparison to it's price with the ratio of the marginal utility of another commodity in comparison to it's price.

A situation when $\frac{P_{X}}{P_{Y}} > \frac{M U_{X}}{M U_{Y}}$ is better than when $\frac{P_{X}}{P_{Y}} = \frac{M U_{X}}{M U_{Y}}$ .

The correct option is B False
The ideal situation is of equilibrium which occurs when consumer equates the ratio of marginal utility derived from one commodity in comparison to it's price with the ratio of the marginal utility of another commodity in comparison to it's price.