Question
When onion price hits hard, the poor man simply stops buying it. Which one of these is the correct explanation for this?
Answer: Option A
:
A
A consumer buys a commodity only when a rupee spent on it yields rupee worth of satisfaction (MUM). A poor man stops the consumption of onion when he finds that a rupee spent on it does not yield rupee worth of satisfaction (no matter what quantity of onions is purchases), so that, Mux/PX<MuM.
Was this answer helpful ?
:
A
A consumer buys a commodity only when a rupee spent on it yields rupee worth of satisfaction (MUM). A poor man stops the consumption of onion when he finds that a rupee spent on it does not yield rupee worth of satisfaction (no matter what quantity of onions is purchases), so that, Mux/PX<MuM.
Was this answer helpful ?
More Questions on This Topic :
Question 1. Concavity of PPC implies:....
Submit Solution