Write short notes on: 1. Equi-marginal utility

Write short notes on:
1. Equi-marginal utility
ANSWER:

1) Equi-marginal utility implies that a consumer allocates his expenditure on various commodities in such a manner that the utility derived from each additional unit of the rupee spent on each of the commodities is equal. Algebraically, this is represented by the following equation:

Where MUx, MUy, MUn are the marginal utilities derived from the goods X, Y and N, respectively; Px, Py, Pn are the prices of the goods X, Y and N, respectively; and MUm is the marginal utility of money.

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