A consumer spends all his income of Rs 6000 on two goods - Food and clothing and is buying 12 units each of both the goods. At the present level of consumption, the marginal rate of substitution of clothing for food is 3. The price of food per unit is Rs. 400 whereas that of clothing is Rs. 100. What should a consumer do to attain the equilibrium?

Option 1 -> MRS < Price ratio, so consumer should reduce food and increase clothing.

Option 2 -> This would move away from equilibrium as it's the opposite of what's needed.

Option 3 -> Reducing both wouldn't help achieve equilibrium condition.

Option 4 -> Consumer is not at equilibrium since MRS ≠ Price ratio.

Hence, Option 1: He should reduce the consumption of food and increase the consumption of clothing -> At equilibrium, MRS must equal the price ratio (Pf/Pc). Here, MRS of clothing for food = 3, while Pf/Pc = 400/100 = 4. Since MRS (3) < Price ratio (4), the consumer values food relatively less compared to market prices. This means food is relatively expensive and clothing is relatively cheap for this consumer's preferences. To reach equilibrium, the consumer should reduce food consumption (making it more valuable, increasing MRS) and increase clothing consumption (making it less valuable, increasing MRS). This adjustment will move MRS from 3 towards 4, achieving equilibrium where MRS = Pf/Pc = 4. -> correct