Answer to Question #215457 in Microeconomics for Ninu

Question

Explian the two assiciated concept used to determine the satisfaction or utility of a consumer.

Answer 1

1.Cardinal utility. Utility is measured using numerical values. Models that use it use utils, which is a theoretical unit of utility.

2.Ordinal utility. This uses rankings instead of values. The subjective differences between consumers and products are removed and all that remains are the ranked preferences.