Advertisements
Advertisements
प्रश्न
Explain the Law of Equi-Marginal Utility.
State the law of equi-marginal utility.
Advertisements
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.
APPEARS IN
संबंधित प्रश्न
Answer the following question :
Explain the relationship between ‘total utility’ and ‘marginal utility’.
State whether the following statements are TRUE or FALSE:
In deficit budget, expenditure is more than income.
Choose the correct answer :
The capacity of a commodity to satisfy human want is known as _________.
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:
When MU is ______________ TU decreases.
State the following statement is True or False:
MU and TU are equal at the initial stage.
Define the following concept:
Total utility
Give reason or explain:
Utility is a psychological term.
Write short note on:
Equi-marginal utility
Answer the following question:
Explain the relationship between TU and MU.
Define marginal utility.
Choose the correct answer from given options
When marginal utility is zero, total utility is
What does total utility (TU) represent?
When does total utility reach its maximum point?
What is the consequence of continuing to consume after marginal utility becomes negative?
