Question

Which of the following approach assumes that utility can be measured in terms of numbers like 1, 2, 3, 4, & 5?

• A. Cardinal Approach
• B. Ordinal Approach
• C. Either A or B
• D. Both A and B

Answer 1

The correct option is A Cardinal Approach

In Cardinal approach, utility can be measured in numeric terms. The unit of measuring utility is known as 'utils'. The utility varies from customers to customers. This approach is invented by the classical economists.