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प्रश्न
Explain the Law of Equi-Marginal Utility
उत्तर
Law of Equi-Marginal Utility states that a consumer allocates his expenditure on various commodities in such a manner that the utility derived from each additional unit of the 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 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 of income MO1 is spent on commodity y.
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संबंधित प्रश्न
Answer the following question.
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.
Choose the correct answer :
The capacity of a commodity to satisfy human want is known as _________.
Fill in the blank with appropriate alternatives given below:
Marginal utility diminishes, as consumption of commodity ________.
State the following statement is True or False:
MU and TU are equal at the initial stage.
Define or explain 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.
Answer the following question.
Define marginal utility. When can it be negative?
Answer the following question.
Discuss briefly, using a hypothetical schedule, the relation between marginal utility and total utility.
Choose the correct answer from given options
When marginal utility is zero, total utility is
Utility maximising consumers would like to decrease the consumption when ______.
