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Home Ľ Indifference Curve Analysis of Consumer's Equilibrium

Indifference Curve Analysis of Consumer's Equilibrium:

 

Theory of Ordinal Utility:

 

The indifference curve indicates the various combinations of two goods which yield equal satisfaction to the consumer. Continue reading.

 

Marginal Rate of Substitution:

 

The concept of marginal rate substitution (MRS) was introduced by Dr. J.R. Hicks and Prof. R.G.D. Allen to take the place of the concept of Diminishing Marginal Utility. Continue reading.

 

Properties of Indifference Curves:

 

An indifference curve shows combination of goods between which a person is indifferent. Continue reading.

 

Price Line or Budget Line:

 

The understanding of the concept of budget line is essential for knowing the theory of consumerís equilibrium. Continue reading.

 

Consumer's Equilibrium Through Indifference Curves:

 

The term consumerís equilibrium refers to the amount of goods and services which the consumer may buy in the market given his income and given prices of goods in the market. Continue reading.

 

Application of Indifference Curve Analysis:

 

We now describe in brief as to how indifference curves and budget lines can be used to analysis the effects on consumption due to (a) changes in the income of a consumer (b) changes in the price of a commodity. Continue reading.

 

Comparison Between Indifference Curve Analysis and Marginal Utility Analysis:

 

There is difference of opinion among economists about the superiority of indifference analysis over cardinal utility analysis. Continue reading.

 

Consumer's Surplus:

 

The concept of consumerís surplus was introduced by Alfred Marshall. According to him, a consumer is generally willing to pay more for a given quantity of good than what he actually pays at the price prevailing in the market. Continue reading.

 

 

 

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Rent
Wages
Interest
Profits
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance
History of Money

 

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