Different approaches to the consumer behavior
1. cardinal approach
- utility is measurable in terms of number
- util is measure of utility
- its also known as Marshallian analysis or marginal utility analysis
- here consumer is in equilibrium when his marginal utility is equal to the price of the commodity, MUx = Px
2. ordinal approach
- here utility cant be measured
- its Hicksian utility approach or indifference curve approach
- here the consumer is in equilibrium when the slopes of budget line equal to the slope of indifference curve
- Px/Py = MRSxy
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