| Term | Meaning | | :--- | :--- | | | Want-satisfying capacity of a good. | | Total Utility (TU) | Sum of MU from all units consumed. | | Marginal Utility (MU) | Additional utility from 1 extra unit. ( MU_n = TU_n - TU_n-1 ) | | Law of DMU | As consumption increases, MU eventually decreases. | | MU of Money (MU(_m)) | Utility derived from spending 1 extra rupee on any good. |
There are two main approaches to determining equilibrium in Class 11:
Before understanding equilibrium, you must master the concept of . consumer equilibrium class 11 notes free
Now, let's explore these concepts in detail to give you a complete understanding for your exams.
Before diving into equilibrium, you must understand how economists measure human satisfaction. | Term | Meaning | | :--- |
[ \fracMU_xP_x = \fracMU_yP_y = MU_m ]
: The consumer’s budget and market prices remain constant during the analysis. Diminishing Marginal Utility ( MU_n = TU_n - TU_n-1 ) |
She pointed to the notes:
A consumer consumes two goods X and Y. The price of X is ₹2 and price of Y is ₹1. The MU schedule is given below. The consumer's income is ₹10. Find the equilibrium combination.