Question

Name the basic approaches to consumer behaviour.

Answer 1

• Utility approach

1. The utility approach involves the use of measurable (cardinal) utility to study consumer behaviour.
2. Marshall is the chief exponent of the utility approach to the theory of demand. It is known as cardinal utility analysis or Marginal utility analysis or Marshallian utility analysis.

• Indifference curve approach
  The indifference curve approach was the idea of comparable utility [ordinal utility] J.R. Hicks and R.G.D. Allen introduced the indifference curve approach.