Answer to Question #172822 in Microeconomics for celine

Question

Prove that the utility approach and the indifference-curve approach yield the same consumer equilibrium. Consider two goods, A and B, to explain the utility approach and the indifference curve approach.

Answer 1

In utility approach the consumer chooses the good that maximises his utility. As more and more units of the good are taken,with every extra unit consumed,the marginal utility declines .This is the concept of diminishing marginal utility. 

In indifference curve approach the consumer chooses the good on the highest indifference curve as it gives him the maximum utility.

The approaches thus give the same consumer equilibrium since for both the consumer chooses the good that maximises his utility.