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प्रश्न
Explain the Law of Equi-Marginal Utility.
State the law of equi-marginal utility.
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उत्तर
The law of equimarginal utility states that a consumer allocates his expenditure on various commodities in such a manner that the utility derived from each additional rupee spent on each of the commodities is equal. Algebraically, this is represented as the following equality.
`(MU_x)/(P_x) =(MU_y)/(P_y) = (MU_m)/(P_n) = ...MU_m`
In the above figure, OO1 represents the total income of a consumer. MUx and MUy represent the Marginal Utility curves of commodity x and commodity y, respectively. Point E represents the point of the consumer's equilibrium, where:
`(MU_x)/(P_x) = (MU_y)/(P_y) = MU_m`
At this point, OM amount of income is spent on commodity x and the remaining amount ofincome,e MO1 is spent on commodity y.
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संबंधित प्रश्न
Explain the relationship between Total utility and Marginal utility.
State whether the following statements are TRUE or FALSE:
Marginal utility increases with increase in consumption.
State whether the following statements are TRUE or FALSE:
In deficit budget, expenditure is more than income.
Do you agree with the following statements? Give reasons.
Marginal utility and Total utility is same.
Fill in the blank with appropriate alternatives given below:
Marginal utility diminishes, as consumption of commodity ________.
Define the following concept:
Total utility
Give reason or explain:
Utility is a psychological term.
Give reason or explain:
Utility is ethically neutral.
Write short note on:
Equi-marginal utility
Answer the following question:
Explain the relationship between TU and MU.
State with reason whether you agree or disagree:
When MU is zero, TU diminishes.
Define marginal utility.
Answer the following question.
Discuss briefly, using a hypothetical schedule, the relation between marginal utility and total utility.
Utility maximising consumers would like to decrease the consumption when ______.
What does total utility (TU) represent?
