What is the similarity between cardinal utility theory and ordinal utility theory?

Answer 1

both obeys the law of diminishing marginal utility

Answer 2

When discussing cardinal vs. ordinal, it is helpful to look at what the words mean. The distinguishing factor here is between cardinal and ordinal numbers. Cardinal numbers are 1, 2, 3; ordinal numbers, 1st, 2nd, 3rd. Some crucial differences follow from that. Whereas mathematical operations can be performed on cardinal numbers, they cannot be performed on ordinal numbers. Now, when talking about cardinal utility, it is an attempt to ''measure the utility of various alternatives. When talking about ordinal utility, it is the ''ranking of alternatives.'''' Cardinal utility is, however, an erroneous concept. It is impossible to "measure" utility. People can only say "I prefer A to B", but cannot meaningfully say "I prefer A 2.5 times more than B" or something to that effect. Furthermore, comparisons of utility between different individuals are impossible and meaningless, as well as between the same individual at different points in time (as individuals can and do change their preferences -- that is, ordinal value-scale rankings). Because value is subjective, we cannot measure it and cannot compare between two different people, or even between the same person at different times. To clarify, ordinal utility culminates in value-scales: 1st: A

2nd: B

3rd: C whereas cardinal utility is the erroneous attempt at measurement: 10utils -- A

7utils -- B

3utils -- C

Omar Tawfik.

Answer 3

Utility means satisfaction that a consumer derives from commodities and services by purchasing different units of money. Cardinal utility means satisfaction that can be measured in numbers such as 1, 2, and 3. While ordinal utility refers to satisfaction, it cannot be measured in numbers.

Ordinal utility emphasizes ordering/rank of bundles of goods.

Cardinal utility emphasizes the size of the difference between two bundles of goods.

Answer 4

Cardinal utility states that the satisfaction that the consumer derives by consuming goods and services can be measured with numbers. Ordinal utility states that the satisfaction that the consumer derives from the consumption of goods and services cannot be measured in numbers. Secondly, whereas the cardinal utility is a quantitative measure, ordinal utility is a qualitative measure.

Answer 5

Cardinal Utility and Ordinal Utility are both concepts of economics. Cardinal Utility is the theory that implies that the utility gained from a product or service is measurable and the magnitude of measurement is meaningful. Whereas Ordinal Utility implies that the utility of a good or service cannot be measured by using an objective scale. Cardinal Utility is measurable and quantitative whereas Ordinal Utility is not measurable and is qualitative.

Answer 6

the theory is base on the assumption that in a basket of commodities, an individual can differentiate and measure the amount of utility they derive from each commodity in the basket