For a good with MU in utils, MUₓ = 24 utils, Pₓ = ₹6 and MUₘ = 4 utils. Is the consumer in equilibrium?

No, because MUₓ is greater than PₓCorrect answerYour answerYes, because MUₓ ÷ Pₓ = 24 ÷ 6 = 4 = MUₘCorrect answerYour answerNo, because MUₓ ÷ Pₓ is 6Correct answerYour answerNo, because MUₘ should be zeroCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

Utility per rupee from X = 24 ÷ 6 = 4 utils.
That equals the utility of a rupee kept, so the condition MUₓ ÷ Pₓ = MUₘ holds.

Worth noting

Comparing 24 utils with ₹6 directly mixes units; divide by price first.

Concept: Checking the one-good condition
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsEquilibrium with one good

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For a good with MU in utils, MUₓ = 24 utils, Pₓ = ₹6 and MUₘ = 4 utils. Is the consumer in equilibrium?

Explanation