The law of equi-marginal utility says that a consumer buying two goods is in equilibrium when

the marginal utility per rupee is the same for both goodsCorrect answerYour answerthe marginal utility of both goods is the sameCorrect answerYour answerthe prices of both goods are the sameCorrect answerYour answerhe buys equal quantities of both goodsCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Condition: MUₓ ÷ Pₓ = MUᵧ ÷ Pᵧ = MUₘ, with the whole income spent.
It is the utility per rupee that must be equal, not the utility itself.

Worth noting

Equal MUs would be right only if the two prices were equal.

Concept: Law of equi-marginal utility
Typical timeTypical: 40 s
Your timeYours: —

The rule this testsEquilibrium with two goods

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The law of equi-marginal utility says that a consumer buying two goods is in equilibrium when

Explanation