Please help with a suitable answer for Q-20.

Please help with a suitable answer for Q-20. -1 O C 0 O 3 3

Dear Student
In the question when MUx/Px  >  MUy/Py
This implies consumer is not in equilibrium. thus Mr. Aman would increase his consumption of commodity X till the equilibrium quantity is reached. That is where the equilibrium is resorted by the equality between the marginal utilities of each commodities.

MUx/Px  =  MUy/Py
i.   TRUE   because downward slope of indifference curve to the right implies that a consumer can not have more of both goods simultaneously. 
ii. FALSE  two indifference curve can not intersect each other, as two bundles of commodities can not provide same level of satisfaction.
iii. TRUE  As consumer attains hos equilibrium at the point where the budget line is tangent to indifference curve and is convex to origin.
iv. FALSE Indifference curve are drawn under the ordinal approach to consumer behaviour.


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