Home
Class 11
ECONOMICS
A consumer consumers only two goods X an...

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

Text Solution

Verified by Experts

The correct Answer is:
N/a
For a consumer to be in equilibrium ,
`(MU_X)/P_X=(MU_Y)/P_Y`
According to the question
`(MU_X)/P_X gt (MU_Y)/P_Y " " or " " 4/3 gt 3/3 " " or " " 1.33 gt 1`
Hence the consumer is not in equilibrium . Since per rupee `MU_X` is greater than per rupee `MU_Y` or commodity X gives the consumer more satisfaction than commodity Y, the consumer will start buying more of X and less of Y. Law of DMU applies `MU_X` falls and `MU_Y` rises till equilibrium is reached at `(MU_X)/P_X=(MU_Y)/P_Y`
Doubtnut Promotions Banner Mobile Dark
|

Topper's Solved these Questions

  • CONSUMER'S EQUILIBRIUM

    RADHA BHUGANA|Exercise PRACTICAL APPLICATIONS|16 Videos

  • CONSUMER'S EQUILIBRIUM

    RADHA BHUGANA|Exercise LET US RECAPITULATE|8 Videos

  • CONCEPTS OF REVENUE

    RADHA BHUGANA|Exercise Unsolved numericals|4 Videos

  • ELASTICITY OF DEMAND

    RADHA BHUGANA|Exercise Unsolved Numericals|24 Videos

Similar Questions

Explore conceptually related problems

A consumer consumes only two goods X and Y. MU 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 consumers only 2 goods X and Y. The marginal utilities of X and Y is 3. Prices of X and Y are Rs.2 and Rs.1 respectively. Is consumer in equilibrium ? What will be further reaction of the consumer ? Give reasons .

Knowledge Check

  • A consumer consumes only two goods X and Y and is in equilibrium with MU_(x)=MU_(y) , then:

    A
    `P_(x)=P_(y)`
    B
    `P_(x)ltP_(y)`
    C
    `P_(x)gtP_(y)`
    D
    Any of the above

    • Similar Questions

    Explore conceptually related problems

    A consumer consumes only two good X and Y. Marginal utilities of X and Y are 5 and 4 respectively. The prices of X and Y are Rs 4 per unit and Rs 5 per unit respctively. Is the consumer in equilibrium ? What will be the further reaction of the consumer ? Explain

    A consumer consumes only two goods X and Y. The Marginal Rate of Substitution is 1. Price of X and Y are Rs 3 and Rs 4 per unit respectively. Is the consumer in equilibrium ? What will be further reaction of the consumer ? Give reason

    A consumer consumes only two goods X and Y and prices of Goods X and Y are Rs 4 and Rs 2 respectively. What will be the MRS_(XY) when consumer is in equilibrium ?

    A comsumer buys a combination of two goods: X and Y with marginal utilities equal to 30 utils and 35 utils respectively. Price of X is Rs 6 per unit. The consumer will be in equilibrium only when price of Y is 7 per unit.

    A consumer consumers only two goods X and Y whose prices are Rs 5 and Rs 4 per unit respectively. If MU_(Y) = 16 at the point of consumer's equilibrium, calculate MU_(X) .

    A consumer consumes only two goods X and Y and is in equilibrium. Price of good Y rises. Show that it will lead to fall in demand for good Y.

    A consumer consumes only two goods X and Y whose prices are Rs 6 and Rs 3 per unit respectively. What will be the MRS_(XY) , when the conumer is in equilibrium ?

    Home
    Profile