Q.1. what are indifference curves? Explain the consumers equilibrium under the assumptions of ordinal approach. Ans.

An indifference curve is a graph showing different bundles of goods between which a consumer is indifferent. That is, at each point on the curve, the consumer has no preference for one bundle over another. One can equivalently refer to each point on the indifference curve as rendering the same level of utility (satisfaction) for the consumer. Utility is then a device to represent preferences rather than something from which preferences come.[1] The main use of indifference curves is in the representation of potentially observable demand patterns for individual consumers over commodity bundles. Ordinal Approach is the Indifference Curve approach. Consumer equilibrium is the point where consumer attains the highest level of satisfaction. There are two conditions of equilibrium under ordinal approach1. Necessary conditionBudget line is tangent to the highest possible indifference curve. 2. Sufficient conditionAt equilibrium the indifference curve must be convex to the origin. Thus at equilibrium ,Pox/Py(absolute slope of the budget line)= dx/dy(absolute slope of indifference curve). In simple words it is the determination of consumers equilibrium with the indifference curve.