A consumer, Mr. Aman is in state of equilibrium consuming two goods X and Y, with given prices P_(x) " and " P_(y). Explain what will happen if: (a) MU_(x)//P_(x) is greater than MU_(y)//P_(y), (b) P_(y) falls.

A consumer, Mr. Aman is in state of equilibrium consuming two goods X

1.	A consumer, Mr. Aman is in state of equilibrium consuming two goods X and Y, with given prices P_(x) " and " P_(y). Explain what will happen if: (a) MU_(x)//P_(x) is greater than MU_(y)//P_(y), (b) P_(y) falls.
Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :If <a href="https://interviewquestions.tuteehub.com/tag/mu-566056" style="font-weight:bold;" target="_blank" title="Click to know more about MU">MU</a>(x)//P(x) is greater than MU(y)//P(y), then this would <a href="https://interviewquestions.tuteehub.com/tag/induce-499186" style="font-weight:bold;" target="_blank" title="Click to know more about INDUCE">INDUCE</a> Mr. Aman to buy more of X in place of Y.b) If P(y) falls then Mr. Aman will <a href="https://interviewquestions.tuteehub.com/tag/consume-409809" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUME">CONSUME</a> more of <a href="https://interviewquestions.tuteehub.com/tag/good-1009017" style="font-weight:bold;" target="_blank" title="Click to know more about GOOD">GOOD</a> Y.</body></html>