Dominick Salvatore Schaums Outline of Microeconomics, 4th edition Schaums Outline Series 2006

88 CONSUMER DEMAND THEORY [CHAP. 4
Fig. 4-24
Note that at points D, E, and G in panel A of Fig. 4-24, the
MRS xy ¼ MU x
MU y
¼ P x
P y
¼ 2
Thus, as we move from one point of consumer equilibrium to another, both the MU x and the MU y can fall, rise or remain
unchanged. All that is required for equilibrium is that the ratio of the MU x to the MU y remain constant and equal to the
MRS xy and P x /P y .
In panel B of Fig. 4-24, line D 0 E 0 G 0 is a portion of this consumer’s Engel curve for commodity X. It shows
that at an income level of $12 per time period, the consumer purchases 3 units of X; at an income level of $16,