CA Foundation Exam  >  CA Foundation Questions  >  In a situation whenMRS>PX/PY, the consumer... Start Learning for Free
In a situation when MRS>PX/PY, the consumer would react by
  • a)
    diminishing the consumption of commodity-X
  • b)
    increasing the consumption of commodity-Y
  • c)
    increasing the consumption of commodity-X
  • d)
    none of these
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
In a situation whenMRS>PX/PY, the consumer would react bya)diminish...
MRS is the amount of Good-Y which a consumer is willing to give up for one unit more of Good-X. In a situation when MRS>PX/PY, the consumer would react by increasing the consumption of commodity-X.
View all questions of this test
Most Upvoted Answer
In a situation whenMRS>PX/PY, the consumer would react bya)diminish...
(Marginal Rate of Substitution) is equal to the ratio of prices of two goods, it means that the consumer is in equilibrium. This is because at this point, the consumer is indifferent between consuming more of one good or the other. Any further increase in the consumption of one good would require a decrease in the consumption of the other good, and this would result in a decrease in overall satisfaction. Therefore, the consumer will not make any changes to their current consumption pattern as they are already at their optimal point.
Explore Courses for CA Foundation exam
In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer?
Question Description
In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer?.
Solutions for In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice In a situation whenMRS>PX/PY, the consumer would react bya)diminishing the consumption of commodity-Xb)increasing the consumption of commodity-Yc)increasing the consumption of commodity-Xd)none of theseCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev