Indifference curve analysis is based on ordinal utility. This concept is used in microeconomics to analyze consumer behavior. The basic idea of indifference curve analysis is that consumers try to maximize their satisfaction or utility subject to their budget constraint.

Ordinal utility refers to the idea that consumers can rank their preferences but cannot assign numerical values to them. In other words, consumers can say that they prefer one good over another, but they cannot say how much more they prefer it. This is in contrast to cardinal utility, which assumes that consumers can assign numerical values to their preferences.

Explanation of Indifference Curve Analysis:

Indifference curve analysis is based on the following assumptions:

1. Consumers try to maximize their satisfaction or utility subject to their budget constraint.
2. Consumers are rational and can rank their preferences.
3. Consumers face a tradeoff between different goods and services.
4. Consumers have a fixed income and prices of goods and services are given.

Indifference curves are graphical representations of the different combinations of two goods that give the consumer the same level of satisfaction or utility. The slope of an indifference curve represents the rate at which the consumer is willing to trade off one good for another.

Indifference curves have the following properties:

1. They slope downwards from left to right.
2. They are convex to the origin.
3. They cannot intersect each other.

The budget constraint is the line that represents all the combinations of two goods that the consumer can afford given his or her income and the prices of the goods. The point where the budget constraint intersects an indifference curve represents the consumer's optimal choice of the two goods.

Conclusion:

In conclusion, indifference curve analysis is based on ordinal utility, which assumes that consumers can rank their preferences but cannot assign numerical values to them. Indifference curves represent the different combinations of two goods that give the consumer the same level of satisfaction or utility. The slope of an indifference curve represents the rate at which the consumer is willing to trade off one good for another.

Indifference curve analysis is based on ordinal approach as it doesn't involve any mathematical calculations, means it assumes utility as a purely psychological concept and not measurable in terms of numbers therefore is based upon psychology of a consumer who makes choice between two commodities