A consumer is said to be in equilibrium, if:
✓ Correct answer: a) he is able to fulfil his need with a given level of income
ExplanationA consumer is said to be in equilibrium when they allocate their limited income in such a way that they maximize their total satisfaction (utility) from the goods and services they consume i.e. he is able to fulfil his need with a given lev- el of income.This concept is based on the theory of consumer behavior in economics.Conditions for Consumer Equilibrium:Budget Constraint: The consumer has a fixed level of income and faces given prices for goods and services.The total expenditure on goods and services cannot exceed the consumer’s income.Utility Maximization: The consumer allocates their income in such a way that the marginal utility per unit of money spent is equal across all goods and services.No Further Reallocation: The consumer cannot increase their total utility by reallocating their income between goods and services.380
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