Translate

Visit to www.mrmcse.com

09 March 2018

Show the difference between cardinal and ordinal utility




Cardinal Utility
Ordinal Utility
(i) Cardinal utility is the utility where in the satisfaction derived by the consumers from the consumption of good or service can be measured numerically.
(i) Ordinal utility states that the satisfaction which a consumer derives from the consumption of product or service can`t be measured numerically.
(ii) Cardinal utility measures the utility objectively.
(ii) There is a subjective measurement of ordinal utility.
(iii) Cardinal utility is less realistic, as quantitative measurement of utility is not possible.
(iii) The ordinal utility is more realistic as it relies on qualitative measurement.
(iv) Cardinal utility is based on marginal utility analysis.
(iv) The concept of ordinal utility is based on indifference curve analysis.
(v) The cardinal utility is measured in terms of utile. i.e. units of utility
(v) The ordinal utility is measured in terms of ranking of preferences of commodity when compared to each other.
(vi) Cardinal utility approach propounded by Alfred Marshall and his followers.
(vi) Ordinal utility approach pioneered by Hicks and Allen




No comments:

Post a Comment