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BASIC CONCEPT OF ORDINAL UTILITY AND INDIFFRENCE CURVE

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    Learning Contents:                                                              ·          Concept of ordinal utility ·            Concept of Indifference curve Introduction In the previous topic of consumer’s equilibrium- cardinal utility analysis, we have understood that utility or satisfaction is measured in numerical terms or cardinal numbers like 1,2,3,4 and so on. Just think, Do we actually measure utility in numerical terms? Do we say that drinking a cup of coffee gave me 5 utils of satisfaction? Obviously no. Normally, we say that a cup of coffee offers greater satisfaction than a cup of tea or vice versa. Prof. Hicks assumes that utility can best be described when it is ranked like first, second, etc. or compared as high or low. “ Comparison of utility (in terms of the higher or lower level of satisfaction) refers to  the ordinal concept of utility”. An example of ordinal utility is that if I have given two things to eat say Pizza and Burger I would say my fir