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8 Jul 2018
What is the difference between Cardinal or Ordinal utility? Explain why utilizing Ordinal utility may be superior to Cardinal utility.
What is the difference between Cardinal or Ordinal utility? Explain why utilizing Ordinal utility may be superior to Cardinal utility.
Beverley SmithLv2
11 Jul 2018
Related textbook solutions
Related questions
- Suppose a particular consumer has 8 birrs to be spent on two goods, A and B. The unit price of good A is 2 birr and the unit price of B is 1 birr. The marginal utility (MU) she gets from the consumption of the goods is given below.
Ā
|
Quantity |
TUA |
TUB |
|
1 |
36 |
30 |
|
2 |
24 |
22 |
|
3 |
20 |
16 |
|
4 |
18 |
12 |
|
5 |
16 |
10 |
|
6 |
10 |
4 |
- Based on the cardinal analysis, what is the combination of the two goods that gives maximum utility to the consumer?
- What is the total utility at the utility maximization level?
