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Consumer equilibrium is the point where consumer attains highest level of satisfaction. There are two conditions of equilibrium under ordinal approach
1- Necessary Condition:
'Budget line is tangent to the highest possible indifference curve.'
2- Sufficient Condition:
'At equilibrium, Indifference curve must be convex to the origin'
Thus, at equilibrium , Px/Py (absolute slope of Budget line) = dy/dx (absolute slope of Indifference Curve)
(In simple words, it'd determination of consumer's equilibrium with the help of Indifference curve.)
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Consumer equilibrium utility approach?
when does consumer attain equilibrium under the utility approach
To what extent is the ordinal utility approach an improvement of cardinal approach?
to what extent is ordinal utility approach and improvement cardinal in explaining consumer behaviour in economics
Differences between cardinal and ordinal utility approach?
A difference is that with ordinal utility approaches, you cannot numerically measure the level of consumer satisfaction. With cardinal utility approaches, you can to an extent.
Differentiate between cardinal and ordinal theories of consumer behavior?
. Cardinal Approach refers that you can calculate or Measure the utility (degree of satisfaction) Numerically, while According to ordinal approach you can not measure the utility numerically. 2. Cardinal Approach follow the Law of Diminishing Marginal Utility while Ordinal Approach follow the Indifference Curve. 3.Cardinal Approach Emphasis on units while ordinal approach is based on rank.
A Explain the difference between cardinal and ordinal approach of consumer behavior?
1. Cardinal Approach refers that you can calculate or Measure the utility (degree of satisfaction) Numerically, while According to ordinal approach you can not measure the utility numerically. 2. Cardinal Approach follow the Law of Diminishing Marginal Utility while Ordinal Approach follow the Indifference Curve. 3.Cardinal Approach Emphasis on units while ordinal approach is based on rank. BY SUMIT SONI(IITTM)
Consumer equilibrium utility approach?
when does consumer attain equilibrium under the utility approach
To what extent is the ordinal utility approach an improvement of cardinal approach?
to what extent is ordinal utility approach and improvement cardinal in explaining consumer behaviour in economics
Differences between cardinal and ordinal utility approach?
A difference is that with ordinal utility approaches, you cannot numerically measure the level of consumer satisfaction. With cardinal utility approaches, you can to an extent.
Differentiate between cardinal and ordinal theories of consumer behavior?
. Cardinal Approach refers that you can calculate or Measure the utility (degree of satisfaction) Numerically, while According to ordinal approach you can not measure the utility numerically. 2. Cardinal Approach follow the Law of Diminishing Marginal Utility while Ordinal Approach follow the Indifference Curve. 3.Cardinal Approach Emphasis on units while ordinal approach is based on rank.
A Explain the difference between cardinal and ordinal approach of consumer behavior?
1. Cardinal Approach refers that you can calculate or Measure the utility (degree of satisfaction) Numerically, while According to ordinal approach you can not measure the utility numerically. 2. Cardinal Approach follow the Law of Diminishing Marginal Utility while Ordinal Approach follow the Indifference Curve. 3.Cardinal Approach Emphasis on units while ordinal approach is based on rank. BY SUMIT SONI(IITTM)
What extent is ordinal utility approach an advantage to cardinal utility approach?
cardinal utility
Define ordinal utility?
Ordinal utility is a concept in economics that refers to the ranking of preferences among different alternative choices based on satisfaction or utility derived by an individual. It does not assign a specific numerical value to the level of satisfaction, but simply ranks the different choices in order of preference. This approach helps in understanding consumer behavior and decision-making without needing to quantify utility levels.
What is difference between ordinal approach and cardinal approach?
In consumer behavior, the satisfaction that consumers get by consuming commodities is utility. A cardinalist thinks that utility can be measured, quantified, and expressed in quantitative terms. An ordinalist thinks that you cannot measure utility in quantitative terms.
Define cardinal approach?
The cardinal approach in a careful approach that states that utility is measurable. The ordinal approach disagrees with this theory.
What is consumer equilibrium?
consumer equilibrium states that consumer maximise his utility with the given income and with the given price or when a consumer getting maximum satisfaction with available resources then he will be in a state of equilibrium.
Consumer equlibrium with the help of law of dimnishing marginal utility?
types of equilibrium in consumer theory
How diminishing law guides consumer to get equilibrium?
A consumer buys/consumes a product only if marginal utility derived from it is more than marginal utility of money. As he continues consuming the marginal utility derived from every additional unit goes on diminishing but marginal utility of money remains constant. Both utilities match at a place i.e; where marginal utility of product becomes equal to marginal utility of money the consumer stops consumption thus equilibrium is struck.
