2. Indifference curve analysis
0 Developed - Edge worth
0 It was later preferred by J.R Hicks & R.J.D. Allen
0 indifference curve approach is also known as ordinal
utility approach..
0 consumer express their utility in terms of preference
not in term of quantity.

3. ASSUMPTION OF
INDIFFERENCE CURVE
0 A consumer is assumed to buy any two goods in combinations.
0 A consumer can rank the alternative combinations and compare
their level of satisfaction, and he prefers a combination providing
a higher level of satisfaction.
0 Consumer is rational and his choices are transitive.
0 The consumer behavior is assumed to be constant, throughout
the analysis.

4. INDIFFERENCE CURVE
Good Y
0
An indifference curve may be defined as the
locus of various combination of two goods which
yield the same total satisfaction to the consumer
Good X

5. INDIFFERENT SCHEDULE
For eg:
0 The following table shows the indifference schedule of
combination of biscuits and cups of tea for a
consumer.
combination
A
B
C
D
E
F
Cups of Tea
1
2
3
4
5
6
+
+
+
+
+
+
+
Biscuits
50
38
26
21
17
15

6. Graphical representation of indifference schedule…
Y
60
A
BISCUITS
50
40
B
30
C
D
20
E
F
10
00
0
2
4
CUPS OF TEA
6
8
X

7. INDIFFERENCE MAP
A collection of indifference
curve is known as indifference map.
0 A higher indifference curve indicates a
higher level of satisfaction and vise
versa.
Good y
Y
0
0
Ic3
Ic2
Ic1
Good x
X

8. Thanks….