What Is Ordinal Approach?
Ordinal approach is another name of Indifference curve approach, “Indifference curve is a curve showing same level of satisfaction at different level of consumptions. It is a convex curve downward sloping from left to right on which each every point shows the same level of satisfaction at different level of consumptions. Properties / Characteristics It can never be a concave, zig zag and straight curve. Only tow commodities are used by consumer. There should be no change in Income and prices of goods. There is an application of Diminishing Marginal rate of substitution.( DMRS) Schedule Comodity/ SUGAR WHEAT Satisfaction Combinations X 4 10 100% Y 5 8 100% Z 7 5 100% From the above schedule we see the same level of satisfaction i.e. 100% at different level of consumptions. And if we go to draw the diagram then we find a curve convex to the origin. Here we can see that on attaining 1 unit more of sugar A sacrificed 2 units of Wheat and for getting 2 units more of Sugar A scarified 3 unit
