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Consumer Behaviour Cardinal And Ordinal Utility Analysis — Revision Notes

ICSE · Class 12 · Economics

Consumer Behaviour Cardinal And Ordinal Utility Analysis revision notes for ICSE Class 12 Economics: 4 topics in quick points.

68 questions40 flashcards6 formulas & key relations5 concepts

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A graph showing the relationship between total utility (TU) and marginal utility (MU) as consumption of a good increases. TU increases at a diminishing rate, reaches a maximum, and then declines, whil
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Key Topics to Revise

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1. Utility and Cardinal Utility Analysis

  • Utility is the measure of intensity of want of a good, that is, the desire to have a commodity.
  • Utility is subjective, so it varies from person to person.
  • Utility is different from usefulness and also different from pleasure.
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2. Types of Utility and Relationship Between MU and TU

  • Utility can be classified into total utility and marginal utility.
  • Positive marginal utility means total utility rises with extra consumption.
  • Zero marginal utility is the point of satiety or perfect saturation.
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3. Law of Diminishing Marginal Utility

  • The Law of Diminishing Marginal Utility is the fundamental law of utility analysis.
  • It is a universal law of consumption applicable to all goods and services.
  • Herman Heinrich Gossen, a French economist, was the first to formulate this principle in 1854, though the name was given by Marshall.
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4. Law of Equi-marginal Utility and Consumer's Equilibrium under Cardinal Utility

  • The law of equi-marginal utility was propounded in the nineteenth century by a French Engineer named Gossen.
  • This law is an extension of the law of diminishing marginal utility.
  • It is also called the law of substitution and the law of maximum satisfaction.

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Full Notes

Key Concepts

Utility is the measure of intensityCardinal utility is the utility whereTotal utility is the total satisfactionMarginal utility is addition madeMarginal utility may be positive

Frequently Asked Questions

What are the important topics in Consumer Behaviour Cardinal And Ordinal Utility Analysis for ICSE Class 12 Economics?
Key topics in Consumer Behaviour Cardinal And Ordinal Utility Analysis include Utility and Cardinal Utility Analysis, Types of Utility and Relationship Between MU and TU, Law of Diminishing Marginal Utility, Law of Equi-marginal Utility and Consumer's Equilibrium under Cardinal Utility. Study these first, then practise questions on each for the ICSE Class 12 board exam.
How should I revise Consumer Behaviour Cardinal And Ordinal Utility Analysis for the ICSE Class 12 board exam?
Learn the core ideas first, then work through the 68 practice questions on Consumer Behaviour Cardinal And Ordinal Utility Analysis. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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