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Match List-I with List-II

List-IList-II
(A) Consumer's income changes, but prices remain unchanged. The equation of the budget line.(I) p₁ x₁ + p₂ x₂ = M'
(B) Marginal Rate of Substitution (MRS)(II) p'₁ x₁ + p₂ x₂ = M
(C) The price of a commodity changes, but income remains unchanged. The equation of the budget line.(III) Δ Y/ΔX
(D) Total Utility(IV) MU1+MU2+...+MUn−1+MUnMU₁ + MU₂ + ... + MU_{n-1} + MU_n

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 2

1. Shift in Consumer's Income (A matches with I)

The standard budget line equation is p1x1+p2x2=Mp_1x_1 + p_2x_2 = M, where pp represents the price of the goods, xx represents the quantity, and MM stands for the consumer's total income. If prices are constant but the income changes to a new amount (denoted as M′M'), the formula updates to reflect the new income: p1x1+p2x2=M′p_1x_1 + p_2x_2 = M'.

2. Marginal Rate of Substitution - MRS (B matches with III)

MRS measures how much of one good (Good Y) a consumer is willing to give up to get an additional unit of another good (Good X) without changing their overall satisfaction. It is calculated as the ratio of the change in the quantity of Good Y to the change in the quantity of Good X, written as ΔY/ΔX\Delta Y / \Delta X.

3. Change in the Price of a Commodity (C matches with II)

When the consumer's income (MM) remains fixed but the price of a good changes, the budget line pivots. For instance, if the price of the first good changes from p1p_1 to a new price p1′p'_1, the revised budget line equation becomes p1′x1+p2x2=Mp'_1x_1 + p_2x_2 = M.

4. Total Utility (D matches with IV)

Total Utility is the overall satisfaction derived from consuming a specific quantity of a commodity. It is simply the sum total of the Marginal Utilities (MUMU) gained from each successive unit consumed. The formula is: MU1+MU2+⋯+MUn−1+MUnMU_1 + MU_2 + \dots + MU_{n-1} + MU_n.

Conclusion:

Following this logic, the correct matching sequence is (A) - (I), (B) - (III), (C) - (II), (D) - (IV).

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