As, we know condition for consumer equilibrium is, Necessary Condition Marginal utility of last rupee spent on each commodity is same. Suppose there are two commodities, X and Y respectively. So, for commodity X, the condition is, Marginal Utility in terms of Money = Price of X
Or \(\frac { Marginal\ utility\ of\ s\ product\ in\ util[M{ U }_{ x }] }{ Marginal\ utility\ of\ one\ rupee[M{ U }_{ m }] } \)=Price of X
Or \(\frac { M{ U }_{ x } }{ { P }_{ x } } =M{ U }_{ M }\)    ---------(1)
Similarly: for commodity Y, the condition is,
\(\frac { M{ U }_{ y } }{ { P }_{ y } } =M{ U }_{ M }\)  -----------(2)
Putting equation (2) in (1), we get
\(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)
But as given in the question that the ratio of marginal utility to price in case of X is higher than that in case of Y,
i.e.,\(\frac { M{ U }_{ x } }{ { P }_{ x } } >\frac { M{ U }_{ y } }{ { P }_{ y } } \)
It means marginal utility from the last rupee spent on commodity X is more than marginal utility from the last rupee spent on commodity Y. So, to attain the equilibrium consumer must increase .the quantity of X, which decreases the MUx and decreases the quantity of Y, which will increase the MU. Increase in quantity of y X and decrease in quantity of Y continue till \(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)

As, we know condition for consumer equilibrium is, Necessary Condition Marginal utility of last rupee spent on each commodity is same. Suppose there are two commodities, X and Y respectively. So, for commodity X, the condition is, Marginal Utility in terms of Money = Price of X
Or \(\frac { Marginal\ utility\ of\ s\ product\ in\ util[M{ U }_{ x }] }{ Marginal\ utility\ of\ one\ rupee[M{ U }_{ m }] } \)=Price of X
Or \(\frac { M{ U }_{ x } }{ { P }_{ x } } =M{ U }_{ M }\)    ---------(1)
Similarly: for commodity Y, the condition is,
\(\frac { M{ U }_{ y } }{ { P }_{ y } } =M{ U }_{ M }\)  -----------(2)
Putting equation (2) in (1), we get
\(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)
But as given in the question that the ratio of marginal utility to price in case of X is higher than that in case of Y,
i.e.,\(\frac { M{ U }_{ x } }{ { P }_{ x } } >\frac { M{ U }_{ y } }{ { P }_{ y } } \)
It means marginal utility from the last rupee spent on commodity X is more than marginal utility from the last rupee spent on commodity Y. So, to attain the equilibrium consumer must increase .the quantity of X, which decreases the MUx and decreases the quantity of Y, which will increase the MU. Increase in quantity of y X and decrease in quantity of Y continue till \(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)

As, we know condition for consumer equilibrium is, Necessary Condition Marginal utility of last rupee spent on each commodity is same. Suppose there are two commodities, X and Y respectively. So, for commodity X, the condition is, Marginal Utility in terms of Money = Price of X
Or \(\frac { Marginal\ utility\ of\ s\ product\ in\ util[M{ U }_{ x }] }{ Marginal\ utility\ of\ one\ rupee[M{ U }_{ m }] } \)=Price of X
Or \(\frac { M{ U }_{ x } }{ { P }_{ x } } =M{ U }_{ M }\)    ---------(1)
Similarly: for commodity Y, the condition is,
\(\frac { M{ U }_{ y } }{ { P }_{ y } } =M{ U }_{ M }\)  -----------(2)
Putting equation (2) in (1), we get
\(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)
But as given in the question that the ratio of marginal utility to price in case of X is higher than that in case of Y,
i.e.,\(\frac { M{ U }_{ x } }{ { P }_{ x } } >\frac { M{ U }_{ y } }{ { P }_{ y } } \)
It means marginal utility from the last rupee spent on commodity X is more than marginal utility from the last rupee spent on commodity Y. So, to attain the equilibrium consumer must increase .the quantity of X, which decreases the MUx and decreases the quantity of Y, which will increase the MU. Increase in quantity of y X and decrease in quantity of Y continue till \(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)

As, we know condition for consumer equilibrium is,
Necessary Condition
Marginal utility of last rupee spend on each commodity is same. Suppose there are two commodities, X and Y respectively.
So, for commodity X, the condition is, Marginal Utility in terms of Money = Price of X
Or \(\frac{Marginal utility of a product in utill[MUx]}{Marginal utility of one rupee[MUm]}\)=price of X
Or \(\frac { M{ U }_{ x } }{ P_{ x } } =M{ U }_{ m }\) ------(1)
Similarly, for commodity Y, the condition is
Or \(\frac { M{ U }_{ y } }{ { P }_{ y } } M{ U }_{ m }\) -------(2)
Putting equation (2) in (1), we get
\(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)
But as given in the question that the ratio of marginal utility to price in case of X is lower than that in case of Y, i.e.,
\(\frac { M{ U }_{ x } }{ { P }_{ x } } <\frac { M{ U }_{ y } }{ { P }_{ y } } \). It means, marginal utility Px PII from the last rupee spent on commodity X is less than the marginal utility from the last rupee spent on commodity Y. So, to attain the equilibrium the consumer must decrease the quantity of X which will increase the MUx and increase the quantity of Y, which will decrease the MU. Decrease y in quantity of X and increase in quantity till  \(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \) .

As, we know condition for consumer equilibrium is,
Necessary Condition
Marginal utility of last rupee spend on each commodity is same. Suppose there are two commodities, X and Y respectively.
So, for commodity X, the condition is, Marginal Utility in terms of Money = Price of X
Or \(\frac{Marginal utility of a product in utill[MUx]}{Marginal utility of one rupee[MUm]}\)=price of X
Or \(\frac { M{ U }_{ x } }{ P_{ x } } =M{ U }_{ m }\) ------(1)
Similarly, for commodity Y, the condition is
Or \(\frac { M{ U }_{ y } }{ { P }_{ y } } M{ U }_{ m }\) -------(2)
Putting equation (2) in (1), we get
\(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)
But as given in the question that the ratio of marginal utility to price in case of X is lower than that in case of Y, i.e.,
\(\frac { M{ U }_{ x } }{ { P }_{ x } } <\frac { M{ U }_{ y } }{ { P }_{ y } } \). It means, marginal utility Px PII from the last rupee spent on commodity X is less than the marginal utility from the last rupee spent on commodity Y. So, to attain the equilibrium the consumer must decrease the quantity of X which will increase the MUx and increase the quantity of Y, which will decrease the MU. Decrease y in quantity of X and increase in quantity till \(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \).

(i) Budget line shows all possible combinations of the two goods that a consumer can buy, given i.e and prices of commodities another other combination lying to the right of this line will be unreachable. Any combination lying to the left of this line results in non-spending of his income.
(ii) Higher income means an increase in a consumer's ability to purchase increased quantity of both the goods, represented by a rightward shift of the budget line. The new budget line will form a tangent to a higher indifference curve.

(a) The bundles that this consumer can afford. to buy, (0,0), (0,1), (0,2), (0,3), (0,4), (0,5), (1,0), (1,1), (1,2), (1,3), (1,4), (2,0), (2,1), (2,2), (2,3), (3,0), (3,1), (3,2), (4,0), (4,1) and (5,0).
(b) Bundles that cost exactly no are, (0,5), (1,4), (2,3), (3,2), (4,1), (5,0).
(c) Two bundles that the consumer cannot afford to buy are, (3,3), (4, 2).

In this case the law of diminishing marginal utility will not apply because every effort to get education/ knowledge increases the utility.
Value: Analytic

As, we know condition for consumer equilibrium is, Necessary Condition Marginal utility of last rupee spent on each commodity is same. Suppose there are two commodities, X and Y respectively. So, for commodity X, the condition is, Marginal Utility in terms of Money = Price of X
Or \(\frac { Marginal\ utility\ of\ s\ product\ in\ util[M{ U }_{ x }] }{ Marginal\ utility\ of\ one\ rupee[M{ U }_{ m }] } \)=Price of X
Or \(\frac { M{ U }_{ x } }{ { P }_{ x } } =M{ U }_{ M }\)    ---------(1)
Similarly: for commodity Y, the condition is,
\(\frac { M{ U }_{ y } }{ { P }_{ y } } =M{ U }_{ M }\)  -----------(2)
Putting equation (2) in (1), we get
\(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)
But as given in the question that the ratio of marginal utility to price in case of X is higher than that in case of Y,
i.e.,\(\frac { M{ U }_{ x } }{ { P }_{ x } } >\frac { M{ U }_{ y } }{ { P }_{ y } } \)
It means marginal utility from the last rupee spent on commodity X is more than marginal utility from the last rupee spent on commodity Y. So, to attain the equilibrium consumer must increase .the quantity of X, which decreases the MUx and decreases the quantity of Y, which will increase the MU. Increase in quantity of y X and decrease in quantity of Y continue till \(\frac { M{ U }_{ x } }{ { P }_{ x } } =\frac { M{ U }_{ y } }{ { P }_{ y } } \)

As we know a consumer purchases a good up to the point where margnial utility of the good becomes equal to the price of that good. MU = Price
(i) It can be explained with the help of the following figures. It can be seen from the given figures that Figure B is derived from Figure A.
(ii) In figure A, initially, consumer equilibrium is attained at point E, where let MU (10) = Price (10). Corresponding to point E, we derive point E, in figure B.

(iii) Due to fall in price (suppose from 10 to 8), MU > Price at the given quantity. So, we can say that benefit is greater than cost and the consumer increases the quantity till MU = Price condition is attained at F. Corresponding to point F, we derive the point F₁, in figure B. So, by joining point E. and F₁ together, we derive the demand curve.

The given statement is refuted. When Marginal Utility is positive till point Q as shown in figure then total Utility increases at a diminishing rate and when Marginal Utility is negative after point Q, total Utility decreases.

In case of free chocolates, consumer will carry on the consumption till his total utility is maximum. It means till the additional chocolates gives positive satisfaction, consumer will keep on having chocolates. Let us understand this with the help of the figure Consumer will stop the consumption at the point of satiety (Point 'Q'), i.e., where marginal utility is equal to zero.

(i) When MU decreases, TU increases at a diminishing rate. (As shown in figure till consumption level OQ).
(ii) When MU is zero, TU is maximum at P.
(iii) When MU is negative, TU starts diminishing.

Let P_x = P_y = Rs.10
Money Income = 40
(i) Bundles available to consumer are: (0,0), (0,1), (0,2), (0,3), (0,4), (1,0), (1,1), (1,2), (1,3), (2,0), (2,1), (2,2), (3,0), (3,1) and (4, 0).
(ii) (0,4), (1,3), (2,2), (3,1) and (4,0) cost exactly Rs.40. All the other bundles cost less than Rs.40.

(i) Let the two quantities of goods be X and Y. We are given Px = Rs 4, P_y = Rs.5, Consumer's income (M) = Rs.20.
Budget line equation is,
P_x .X + P_y .Y= M or = 4X + 5Y= 20
(ii) If quantity consumed of good Y = 0, Budget equation becomes,
P_x.X + zero = M = 4.X = 20 = X = 20/4 = 5 units
(iii) If quantity consumed of good X = 0, Budget equation becomes,
Zero + P_y .Y = M
or = 5Y = 20 = Y = 20/5 = 4 units.
(iv) Slope of budget line = P_x/P_y
=4/5 = 0.8