According to the ____ a consumer has a given scale of preference for different combinations of two goods. It is assumed that consumer can rank the goods as 1st , 2nd, 3rd, and 4th.
A
cardinal approach
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B
ordinal approach
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C
either A or B
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D
none of the above
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Solution
The correct option is B ordinal approach In ordinal approach, utility cannot be measured in numeric terms. It can only be ranked or order. This approach is invented by the neo-classical economists.