Question

Match List-I with List-II.

List-I	List-II
A. Marginal rate of Substitutions	I. Slope of Budget Line
B. Budget Line	II. Ratio of Marginal Utility
C. Indifference Curve	III. Locus of equal utility
D. Price Ratio	IV. Constraints based on income

• A. A-II, B-IV, C-III, D-I
• B. A-II, B-III, C-IV, D-I
• C. A-IV, B-III, C-II, D-I
• D. A-II, B-I, C-III, D-IV

Hint:

MRS is the ratio of marginal utilities, while the price ratio gives the slope of the budget line.

Answer 1

The Correct Option is A

Concept: Consumer equilibrium uses concepts like marginal rate of substitution, budget line, indifference curve and price ratio.

Step 1: Match Marginal Rate of Substitution.
Marginal rate of substitution is the ratio of marginal utilities of two goods. \[ MRS_{xy}=\frac{MU_x}{MU_y} \] So, \[ A \rightarrow II \]

Step 2: Match Budget Line.
Budget line shows combinations of goods that a consumer can buy with given income and prices. Hence, it is a constraint based on income. \[ B \rightarrow IV \]

Step 3: Match Indifference Curve.
An indifference curve is the locus of combinations giving equal utility. \[ C \rightarrow III \]

Step 4: Match Price Ratio.
The slope of the budget line is determined by the price ratio. \[ \text{Slope of Budget Line}=-\frac{P_x}{P_y} \] So, \[ D \rightarrow I \] Therefore, the correct matching is: \[ A-II,\ B-IV,\ C-III,\ D-I \]