 Namaskar, dear learners, I am Parag Doctor from Krishnakanta Hendricks State Open University. I welcome you all to my online class on Consumer's Behavior Cardinal Approach. This chapter is included in your first semester economics paper known as Introduction of Economic Theory 1. The issues which I will include in my class are Cardinal and Ordinal Approach to Utility. Next, we will talk about Measurement of Utility. We will also talk about Concept of Frutal Utility and Marginal Utility. We will also talk about the Law of Diminishing Marginal Utility. We will also talk about Consumers Equilibrium, which is explained with the help of Law of Equimersional Utility. We will also talk about Consumers Surplus, which is the one satisfying power of a commodity. We will also talk about Consumers Surplus, which is the one satisfying power of a commodity. There are basically two approaches to measure utility. One is cardinal and second one is ordinal. In case of cardinal measurement of utility, it is assumed that utility can be measured cardinally. Cardinally that means a consumer can tell how much utility he is getting by consuming a particular product say a unit of apple. And in case of ordinal approach, utility cannot be measured cardinally that means you cannot put any kind of numbers to say how much utility you are getting from a particular product. You can only say that you are getting some kind of satisfaction. Suppose if I am saying that if you are consuming two product and both product will give you different utility. Now according to the ordinal approach, you can rank them, you cannot give any kind of numbers towards them. So, that is the basic difference between cardinal and ordinal measurement of utility. So, I am saying that the ordinal means we cannot give any kind of numbers. So next we will discuss about the concept of total and marginal utility. Now, what is total utility? Total utility means the utility of a consumer by consuming the all units of a commodity. Suppose, if I am saying that a consumer is feeling very hungry and from the first he consume one unit of appeal and then that unit of appeal give him the utility of 10 utilities according to the cardinal approach from the second unit he is getting say 5 and from the third unit he is getting say 3, then total utility will be 10 plus 5 plus 3 that means, 18. So, this is called total utility that means, utility attained by a consumer by consuming all the units of a commodity. Now, what is marginal utility? Marginal utility means the additional utility derived by a consumer by consuming the additional unit of a commodity. As I have already given you an example in case of total utility, same example can be given in case of marginal utility. It implies that suppose from the first unit of the commodity consumer is getting say 10 utilities by consuming that by consuming the first unit. Now, when he consume the second unit the utility increases from 10 to 15 that means, it add additional 5 utilities that additional 5 utilities is known as marginal utility. So, there is a in a close relationship between total utility and marginal utility. When there is a increase in total utility, marginal utility also increases. Now, if total utility is maximum that means, marginal utility is 0. Now, if total utility starts falling that marginal utility become negative. The law of diminishing marginal utility or Pramohagman Pranti Upazughita Vidhi. So, this law is basically advocated by the economics Alfred Marshall. So, he was a very famous economics according to Alfred Marshall. When a consumer consume more and more units of the commodity, the additional utility derived from the additional unit of the commodity gradually declines or the additional utility of the commodity gets reduced. So, we see that the overall utility of the commodity is less. So, this is what we call as the economic structure Pramohagman Pranti Upazughita or the law of diminishing marginal utility. So, as a theory the law of diminishing marginal utility. This theory is basically based upon certain assumptions. Like any other social sciences, the theories of economics is also based on certain assumption and the law of diminishing marginal utility is not any exception. It is also based on certain assumption. So, what is the first assumption? The first assumption is that it assumes that utility can be measured cardinally. Next important assumption is that the marginal utility of money is constant. There is no time lag between the consumption of defining means of the commodity. So, what is the second assumption? The first assumption is that the law of diminishing marginal utility is a law of diminishing marginal utility. The law of diminishing marginal utility is severely criticized by the economists because it concentrates only on one commodity. But in day to day life, we experience that we consume different commodities. That means, to survive a consumer has to consume different commodities in a day to day life. But law of diminishing marginal utility is explained only in terms of one commodity. So, considering the ego fact, what Alfred Marshall did? Alfred Marshall developed another theory and on the basis of the theory, he tries to explain the consumer's equilibrium. But you can see that it is a limitation. Alfred Marshall developed a new theory and we can see that it is a law of equimarginal utility. This is basically the normal situation. A consumer in day to day life consumes more than one commodity. Now, according to Alfred Marshall, as a consumer in normal day to day life consumes more than one commodity and his income is limited. So, according to Alfred Marshall, he will distribute his income or he will demand different commodities in such a way that the ratio between marginal utility of that particular commodity and the price of that particular commodity are equal for all commodities. For example, if I am saying that a consumer for a timing, if I am assuming that a consumer is consuming two commodities, say X and Y. That means the condition is like that, that marginal utility of X divided by the price of X must be equal to marginal utility of Y divided by price of Y and which must be equal to marginal utility of money. What are the conditions to satisfy? According to the law of equimarginal utility, as on consumer, as I have already told you, like law of diminishing marginal utility, law of equimarginal utility is also based on certain assumption as I have already discussed with you. So, I will not repeat it again. So, next I will discuss about consumers surplus. So, this is the last issue which I am going to discuss in this class. So, consumer surplus means the difference between what a consumer wants to pay and how much he actually pays. That means, if I am saying that for a particular commodity say X, a consumer is willing to pay say 20 rupees. But the actual price of that particular commodity is rupees 10, then the consumer surplus is 20 minus 10 is equal to 10. So, this is also a very important concept in economics. It tries to explain the difference between the willingness of a consumer to pay for a particular commodity and what he actually pays. So, these are the things we have discussed in this class. Initially, I have started cardinal and ordinal approaches of utility. Then I am trying to define the measurement of utility. Then we have an idea about total utility and marginal utility. Then we discussed about the law of diminishing marginal utility, then consumer's equilibrium with the help of law of equimersional utility. And lastly, we talked about consumer surplus of that upper vector put between. So, I hope that you got some idea about utility and how to measure utility, what is consumer surplus, etcetera. So, thank you for attending this class. Thank you again.