Question

Comparison between utility and indifference curve analysis

Answer 1

Heya...

See the answer here...

Utility analysis ..

It is given by cardinal ..

It states that the satisfaction can be drive and express in terms of utiles as 1,2,3..

Indifference curve analysis..

It is given be ordinal..

It states that the satisfaction can be rank as high or low can't be write in numbers..

Thank you

Answer 2

Heya user ✨✨

⏩Utility refers to want satisfying power of a commodity.

Measurements of Utility⏬⏬

>Cardinal measurements of Utility means that utility can be measured in terms of Cardinal number or units like 1,2,3.

>Ordinal measurements of Utility means that utility can only be ranked (high or low);it cannot be express in terms of units like 1,2,3.

⏺️The Consumer is in Equilibrium when given his income and market prices he plans his expenditure in such a manner that he maximize his total satisfaction.

⏩Indifference curve is a diagrammatic presentation of an Indifference that of a consumer it is a locus of all such points which show different combination of two commodity offering the same level of satisfaction to the consumer.

Assumption of IC Analysis of Consumer Equilibrium ⏬⏬

>Money income of the consumer is given and does not change.

>The consumer spend his income on two goods which are substitutes of each other.

>The consumer is rational he always tries to maximize his satisfaction in a given situation.