Read the two statements and choose the correct option.

I. At the consumer's equilibrium, the whole income is spent.

II. At the consumer's equilibrium, the marginal utilities of the two goods are equal.

Explanation

1. 01

   I is true: the equal-ratio condition is applied together with the whole income being spent.

2. 02

   II is false in general: MU per rupee is equal; MUs themselves are equal only if prices are equal.