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
|
09 March 2018
Show the difference between cardinal and ordinal utility
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