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Difference between Cardinal & Ordinal Utility - Consumer Behaviour, Class 12 & CA CPT Video Lecture

FAQs on Difference between Cardinal & Ordinal Utility - Consumer Behaviour, Class 12 & CA CPT Video Lecture

1. What is the difference between cardinal and ordinal utility?

Ans. Cardinal utility refers to the measurement of utility in numerical terms, where consumers can assign specific values to the satisfaction derived from consuming a good or service. On the other hand, ordinal utility focuses on the rank or order of preferences, without assigning any numerical values to the satisfaction derived from consuming a good or service.

2. How are cardinal and ordinal utility used in consumer behavior?

Ans. Cardinal utility is used to measure the total utility or satisfaction derived from consuming different goods or services, allowing consumers to make rational choices based on maximizing their utility. Ordinal utility, on the other hand, is used to determine the preferred order of consumption, helping consumers rank their preferences and make choices accordingly.

3. Which utility theory is more widely accepted in consumer behavior?

Ans. Ordinal utility theory is more widely accepted in consumer behavior as it focuses on the relative preferences and choices of consumers, rather than assigning specific numerical values to utility. It allows for a more realistic understanding of consumer behavior and decision-making.

4. Can both cardinal and ordinal utility be used together in consumer behavior analysis?

Ans. Yes, cardinal and ordinal utility can be used together in consumer behavior analysis. While ordinal utility theory provides insights into the rank or order of preferences, cardinal utility theory can be used to measure the intensity of satisfaction or utility derived from consuming different goods or services. This combination allows for a more comprehensive understanding of consumer behavior.

5. Are there any limitations to the use of cardinal and ordinal utility in consumer behavior analysis?

Ans. Yes, there are limitations to the use of cardinal and ordinal utility in consumer behavior analysis. Cardinal utility theory assumes that consumers can accurately assign numerical values to utility, which may not always be feasible or accurate. Ordinal utility theory also simplifies consumer preferences by focusing only on the order of preferences, ignoring other factors that may influence consumer choices, such as income or prices. Therefore, while these theories provide valuable insights, they may not capture the full complexity of consumer behavior.

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Oct 21, 2025 Last updated

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