Summary Business economics Module 2 part 2

Module 2: consumer behaviour part 2
Ordinal utility analysis
 Utility is not additive but comparative
 Indifference curve
o Locus of points which show the different combinations of two
commodities among which the consumer is indifferent, i.e. derives
same utility.
 Indifference map
o Group of indifference curves

Indifference curve schedule
= Schedule that Indicates different Combinations of Two Commodities which
yield Equal Satisfaction.




Indifference curve

Presentation of indifference curve
 It is a line that shows all possible
Combinations of Two Goods between which a
person is indifferent
 Different combinations for the same level of
satisfaction




Indifference map

Shift to the right  increase in satisfaction