Answer to Question #145253 in Economics for Calvin

Question

For Kabelo, a consumer of bread and sorghum will be in equilibrium
position if the marginal rate of substitution between the two goods is equal
to ratio of prices of the two goods.’’ Do you agree with the given
statement? Justify your answer

Answer 1

For Kabelo, a consumer of bread and sorghum will be in equilibrium position if the marginal rate of substitution between the two goods which is the ratio of marginal utilities of these goods is equal to ratio of prices of the two goods. So, the statement is correct.