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Gaurav Seth 5 years, 10 months ago
Relationship Between Total Utility And Marginal Utility.
- When marginal utility is positive , total utility increases
- When marginal utility is zero , total utility is at maximum
- When marginal utility is negative , total utility decreases
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Yogita Ingle 5 years, 10 months ago
When we are trying to understand the relationship between foreign exchange rate and national income, then we will have to see the amount of exports and imports done by a country.
If the exchange rate of a country falls with respect to other country then its exports become cheap while imports become expensive.
For example: If exchange rate was US$1= INR 60, and if the exchange rate decreased to US$1=INR 70, then businesses that are selling their products in the US will receive more money. So, if my product was priced at US$5, I was receiving 5*60=INR 300, now the exchange rate depreciated to 70, so for the same priced product in the US that is priced at US$5, I will be receiving 5*70=INR 350. Similarly, for imports, as the exchange rate depreciated to INR 70 and if I want to purchase a smartphone worth US$200; earlier I was paying 200*60=INR 12,000. Now I will paying, 200*70=INR 14,000.
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When consumers make choices about the quantity of goods and services to consume, it is presumed that their objective is to maximize total utility. In maximizing total utility, the consumer faces a number of constraints, the most important of which are the consumer's income and the prices of the goods and services that the consumer wishes to consume. The consumer's effort to maximize total utility, subject to these constraints, is referred to as the consumer's problem. The solution to the consumer's problem, which entails decisions about how much the consumer will consume of a number of goods and services, is referred to as consumer equilibrium.
Posted by Mohd Anas 5 years, 10 months ago
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Rahul Sharma 5 years, 10 months ago
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Shweta Kant 5 years, 9 months ago
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