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MICROECONOMICS CH : 4 CONSUMER'S EQUILIBRIUM INDIFFERENCE CURVE ANALYSIS — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsMICROECONOMICS CH : 4 CONSUMER'S EQUILIBRIUM INDIFFERENCE CURVE ANALYSIS3 Marks
Question
Mr. X consumes two commodities X and Y whose prices are ₹4 and ₹2 per unit respectively. What will be the value of marginal rate of substitution if the consumer is in the state of equilibrium?
✓

Answer

Given, $P_x$ = ₹4; $P_Y$ = ₹2
We know, at the point of equilibrium:
MRS (marginal rate of substitution) = $\frac{P_{ x }}{P_{ y }}$
According to the given question, $\frac{P_X}{P_Y}$ is equal to $\frac{4}{2}=2$ Therefore, value of marginal rate of substitution is equal to 2 in the state of equilibrium.

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