Question 5.

(a) Explain the concept of consumer equilibrium in terms of the Equi-marginal principle. Provide

appropriate graph for explaining you answer

(b) Suppose you have a budget of 1000 taka. The price of one unit of X is 20 Taka, and the price of one

unit of Y is 10 Taka. If X provides you utility and Y gives you disutility, what is the equilibrium amount

of X and Y for the consumer? Explain your answer using appropriate graph.