Indifference Curve Analysis — Part 1: Indifference Curves and MRS: visual lesson, ISC Class 12 Economics

Lesson

Consumer Behaviour: Indifference Curve Analysis

Part 1 — ordinal utility, indifference curves and maps, the marginal rate of substitution and the properties of indifference curves.

In this lesson you will

Distinguish ordinal from cardinal utility and draw an indifference curve and map from a schedule
Calculate the marginal rate of substitution and explain why it diminishes
Explain the properties of indifference curves, including why they never intersect

Part 1 at a glance

Compare

Cardinal: utility is counted in utils (chapter 2).

Ordinal: utility is only ranked — preferred, less preferred or equally preferred.

Concept

An indifference schedule lists combinations of two goods that give the consumer the same satisfaction.