Question

Cardinal theory of utility means ________.

• A. utility can be measured in terms of units
• B. utility cannot be measured by compare
• C. utility is a hypothetical subject
• D. none of the above

Answer 1

The correct option is A utility can be measured in terms of units

Utility can be measured cardinally in terms of utils. There was no standard unit of measuring utility which a person derives from consumption of goods and services. So the economists came up with an imaginary measure called util. Utils are imaginary and psychological units which are used to measure satisfaction (utility) obtained from the consumption of a certain quantity of a commodity.