Cardinal approach is related to :a)Indifference curveb)Equi-marginal utilityc)Law of diminishing returnsd)None of theseCorrect answer is 'B'. Can you explain this answer?

Question

Answer

The cardinal approach is related to Equi-marginal utility.

Explanation:

- Cardinal approach is one of the approaches to measure utility in economics. It emphasizes the quantification of utility and assumes that it can be measured numerically.
- Equi-marginal utility is a concept in economics that assumes that a rational consumer allocates his/her income among different goods in such a way that the marginal utility derived from the last unit of each good is equal.
- Equi-marginal utility is based on the cardinal approach as it involves the measurement of marginal utility in numerical terms.
- The concept of indifference curve, on the other hand, is based on the ordinal approach, which assumes that utility can only be ranked in order of preference, but not measured in numerical terms.
- The law of diminishing returns is a concept in economics that states that after a certain point, the marginal product of a factor of production decreases as the quantity of the factor increases, while holding other factors constant. This concept is related to production, not to utility.
- Therefore, the correct answer is (B) Equi-marginal utility.

Answer

The Cardinal Utility approach is propounded by neo-classical economists, who believe that utility is measurable, and the customer can express his satisfaction in cardinal or quantitative numbers, such as 1,2,3, and so on. In the given options the equal marginal utility is the only one in which the utility can be measured so it follows Cardinal utility approach while in the case of the other options it is ordinal approach

Answer

Option b is the correct answer because cardinal approach advocates that  utility can be measured in terms of hypothetical term i.e.Utils. so under cardinal approach the law of eqi- marginal falls.

Answer

TheCardinal Utility approach is propounded by neo-classical economists, who believe that utility is measurable, and the customer can express his satisfaction in cardinal or quantitative numbers, such as 1,2,3, and so on. In the given options the equal marginal utility is the only one in which the utility can be measured so it follows Cardinal utility approach while in the case of the other options it is ordinal approach

Answer

It is one of the assumptions

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