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Microeconomics Class 12: Sandeep Garg Chapter 2 Solutions

Microeconomics Class 12: Sandeep Garg Chapter 2 Solutions

Q: 2. What are the exact steps to draw a budget line for a consumer, given their income and the prices of two goods as in the Sandeep Garg exercises?

To correctly draw a budget line, follow this method:Step 1: Identify the consumer's total income (M) and the prices of the two goods (Px for Good X and Py for Good Y).Step 2: Calculate the maximum amount of Good X the consumer can buy by dividing total income by the price of Good X (M/Px). This is the horizontal intercept.Step 3: Calculate the maximum amount of Good Y the consumer can buy by dividing total income by the price of Good Y (M/Py). This is the vertical intercept.Step 4: Plot these two points on a graph and connect them with a straight line. This line represents the budget line or price line.

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Class 12 Microeconomics Sandeep Garg Solutions Chapter 2 – Consumer’s Equilibrium

Economics being a conceptual subject, it is one of the most scoring subjects of Class 12. This subject is divided into two parts namely Macroeconomics and Microeconomics. Macroeconomics deals with economic conditions on a large scale while Microeconomics deals with how individual decisions affect the bigger picture of the economy. To have a better grasp refer to Class 12 Microeconomics Solutions Chapter 2 Sandeep Garg along with the textbook.

Consumer’s Equilibrium Class 12 Microeconomics Sandeep Garg

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Sandeep Garg solutions are curated by the economic experts which is included in the latest edition of Sandeep Garg Microeconomics Class 12 textbook solutions. Each question in the PDF format has been designed to impart a comprehensive sight to the students which assists them in their preparation journey. Vedantu moreover has a student-friendly and easy to use website which will guide the students very well. These top-notch questions are very valuable and priceless to the students while they are trying to complete their learning or doing their homework. This is valuable as it consists of everything a student’s needs to study from this chapter. There are endless concepts in economics to remember, therefore at Vedantu we prepare the notes with the guidance of subject-matter experts that will be helpful to students. Hence, students will be able to score good marks and excel in their career.

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Here are some points which will clear your doubt as to why you should use Sandeep Garg solutions for preparing Class 12 Chapter 2 - Consumer Equilibrium?

1. The Sandeep Garg solutions for Class 12 Chapter - Consumer Equilibrium are completely based on the advanced board syllabus.

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3. The questions are provided with precise answers for long and complex questions

4. The Sandeep Garg solutions for Class 12 Chapter 2 - Consumer Equilibrium are simple and easy to understand while preparing and revising.

Consumer’s Equilibrium Is The 2nd Chapter Of Class 12 Microeconomics where you learn how the choices made by individuals in their daily life affects the economy directly or indirectly. The consumer is an end-user of goods and services. So Consumer Behavior is the study that deals with how individual customers, groups, and organizations choose, buy, use, and dispose of goods to fulfil their needs. All in all, it focuses on actions and motives behind actions done in the marketplace.

Consumer equilibrium is the state of balance obtained by a consumer of goods and services, they can buy given their existing income and the prevailing level of the cost prices. It permits customers to have the most satisfaction possible from their income.
Utility- Total satisfaction obtained from the consumption of goods or services

Types - Total Utility and Marginal Utility

Law of Diminishing Utility (LDMU): It states that as people consume more and more units of a commodity, the marginal utility derived from each successive unit goes on decreasing.
Law of Equi-marginal utility and its graphical representation
Graphs and derivations and the numerical are the most important factors of this chapter.

To have an in-depth understanding of Chapter 2, Sandeep Garg Solutions Class 12 Consumers Equilibrium pdf for free.

Illustration

1. What is Total Utility?

The satisfaction that is obtained from the consumption of all possible units of a commodity is known as a total utility.

Preparation Tips For Sandeep Garg Solutions Class 12

Microeconomics Class 12 Chapter 2 Sandeep Garg contains resources like sample papers, previous years' question papers, and mock tests along with worksheets required for practice and revision.
For Consumer’s Equilibrium Class 12 Microeconomics Sandeep Garg focuses on graphs and laws. Numerical, remember formulas and practice them frequently which will help you tackle twisted questions without any difficulty.
Refer Microeconomics Class 12 Chapter 2 Sandeep Garg solutions as it has been compiled compactly and systematically which cuts down your time and effort.

Conclusion

Class 12 Microeconomics Sandeep Garg Solution Chapter 2 Consumers Equilibrium offers students comprehensive learning and helps to develop the skills along with logical and reasoning skills. The Microeconomics Class 12 Chapter 2 Sandeep Garg solutions cover the entire topic and give in-depth knowledge.

FAQs on Microeconomics Class 12: Sandeep Garg Chapter 2 Solutions

1. How do you correctly solve a problem to find a consumer's equilibrium for a single commodity using the marginal utility approach as per the CBSE 2025-26 syllabus?

To find the consumer's equilibrium for a single commodity, follow these steps: First, calculate the Marginal Utility (MU) in terms of money by dividing the MU of the commodity (MUx) by the MU of one rupee (MUm). The equilibrium condition is met when the marginal utility of the commodity in money terms equals its price (MUx / MUm = Px). The consumer is in equilibrium at the quantity where this condition is satisfied, ensuring they get maximum satisfaction for the price paid.

2. What are the exact steps to draw a budget line for a consumer, given their income and the prices of two goods as in the Sandeep Garg exercises?

To correctly draw a budget line, follow this method:

Step 1: Identify the consumer's total income (M) and the prices of the two goods (Px for Good X and Py for Good Y).
Step 2: Calculate the maximum amount of Good X the consumer can buy by dividing total income by the price of Good X (M/Px). This is the horizontal intercept.
Step 3: Calculate the maximum amount of Good Y the consumer can buy by dividing total income by the price of Good Y (M/Py). This is the vertical intercept.
Step 4: Plot these two points on a graph and connect them with a straight line. This line represents the budget line or price line.

3. How do you calculate Marginal Utility (MU) from a given Total Utility (TU) schedule in the exercises for Chapter 2?

The correct method to calculate Marginal Utility (MU) from a Total Utility (TU) schedule is by finding the change in total utility from consuming one additional unit of a commodity. The formula is: MU of the nth unit = TU of n units – TU of (n-1) units. For the first unit, MU is equal to TU. For each subsequent unit, subtract the previous unit's TU from the current unit's TU to find the MU for that specific unit.

4. What is the step-by-step method to identify the point of consumer equilibrium using an indifference map and a budget line?

To find the consumer's equilibrium using indifference curve analysis, you must follow these steps: First, draw the consumer's budget line based on their income and the prices of the two goods. Second, draw the consumer's indifference map, showing various indifference curves. The equilibrium point is where the budget line is tangent to the highest possible indifference curve. At this point, the slope of the indifference curve (Marginal Rate of Substitution, or MRS) is equal to the slope of the budget line (Price Ratio, or Px/Py). This is the optimal consumption bundle.

5. Why is the condition MUx/Px = MUy/Py so essential for solving two-commodity consumer equilibrium problems?

This condition is essential because it ensures the consumer gets maximum satisfaction from their limited income. The ratio MUx/Px represents the marginal utility per rupee spent on Good X, and MUy/Py represents the marginal utility per rupee spent on Good Y. When these two ratios are equal, it means the satisfaction gained from the last rupee spent on either good is the same. If they were unequal, the consumer could increase total utility by reallocating spending from the good with a lower MU-per-rupee to the one with a higher MU-per-rupee, until they become equal.

6. What is a common mistake students make when solving for the slope of the budget line in Chapter 2 exercises, and how can it be avoided?

A common mistake is incorrectly identifying the numerator and denominator for the slope. The slope of the budget line represents the rate at which a consumer can trade one good for another and is calculated as the ratio of the prices of the two goods. The correct formula is -(Price of Good X / Price of Good Y), where Good X is on the horizontal axis and Good Y is on the vertical axis. To avoid this error, always remember to place the price of the good on the horizontal (x-axis) in the numerator and the price of the good on the vertical (y-axis) in the denominator.

7. How does the solution process for finding consumer equilibrium change if the consumer's income doubles but good prices stay the same?

If a consumer's income doubles while prices remain constant, the solution process involves adjusting the budget line. The slope of the budget line (Px/Py) remains unchanged because prices are constant. However, the budget line itself will shift outward, parallel to the original line. This allows the consumer to reach a higher indifference curve, representing a new equilibrium point with a greater quantity of both goods and a higher level of total satisfaction. The fundamental condition of tangency (MRS = Px/Py) still applies, but at a new, higher point.