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Mr x consumes two commodities a and b whose prices are7 and 8 rupees respectively does the Mr x strikes his equilibrium when he is getting marginal utility of a equal to 7 and that of b also equal to 7?
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Mr x consumes two commodities a and b whose prices are7 and 8 rupees r...
Equilibrium of Mr X in Consumption of Commodities A and B
Mr X is consuming two commodities A and B, whose prices are 7 and 8 rupees, respectively. To determine whether Mr X is in equilibrium, we need to consider the concept of marginal utility and the equilibrium condition.
Marginal Utility
Marginal utility is the additional satisfaction or benefit that a consumer derives from consuming an additional unit of a good or service. It is the change in total utility resulting from the consumption of one more unit of a good or service.
In the case of Mr X, let us assume that he is consuming both commodities A and B. The marginal utility of A and B can be represented as follows:
- Marginal Utility of A = MUa
- Price of A = Pa = 7
- Marginal Utility of B = MUb
- Price of B = Pb = 8
Equilibrium Condition
The equilibrium condition states that a consumer will be in equilibrium when the marginal utility per unit of money spent is equal across all goods consumed. In other words, the consumer will continue to consume goods until the marginal utility per rupee spent is the same for all goods.
To determine whether Mr X is in equilibrium, we need to calculate the marginal utility per rupee spent for both commodities A and B.
- Marginal Utility per Rupee Spent on A = MUa / Pa
- Marginal Utility per Rupee Spent on B = MUb / Pb
If Mr X is in equilibrium, then the marginal utility per rupee spent on A and B should be equal. Therefore, we can set up the following equation:
MUa / Pa = MUb / Pb
Substituting the values given in the problem:
MUa / 7 = MUb / 8
To determine whether Mr X is in equilibrium, we need to compare the marginal utility of A and B. If the marginal utility of A is 7 and the marginal utility of B is also 7, then Mr X is in equilibrium.
If the marginal utility of A and B are not equal to 7, then Mr X is not in equilibrium. In this case, he will need to adjust his consumption of either commodity A or B until he reaches equilibrium.
Community Answer
Mr x consumes two commodities a and b whose prices are7 and 8 rupees r...
No he will not strick equilibrium because
mux/px is not equal to muy/py
7/7 is not equal to 7/8
mux/px is not equal to muy/py
7/7 is not equal to 7/8
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Mr x consumes two commodities a and b whose prices are7 and 8 rupees respectively does the Mr x strikes his equilibrium when he is getting marginal utility of a equal to 7 and that of b also equal to 7?
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Mr x consumes two commodities a and b whose prices are7 and 8 rupees respectively does the Mr x strikes his equilibrium when he is getting marginal utility of a equal to 7 and that of b also equal to 7? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Mr x consumes two commodities a and b whose prices are7 and 8 rupees respectively does the Mr x strikes his equilibrium when he is getting marginal utility of a equal to 7 and that of b also equal to 7? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mr x consumes two commodities a and b whose prices are7 and 8 rupees respectively does the Mr x strikes his equilibrium when he is getting marginal utility of a equal to 7 and that of b also equal to 7?.
Mr x consumes two commodities a and b whose prices are7 and 8 rupees respectively does the Mr x strikes his equilibrium when he is getting marginal utility of a equal to 7 and that of b also equal to 7? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Mr x consumes two commodities a and b whose prices are7 and 8 rupees respectively does the Mr x strikes his equilibrium when he is getting marginal utility of a equal to 7 and that of b also equal to 7? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mr x consumes two commodities a and b whose prices are7 and 8 rupees respectively does the Mr x strikes his equilibrium when he is getting marginal utility of a equal to 7 and that of b also equal to 7?.
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