Question

What is the difference between ordinal utility and cardinal​ utility? Ordinal utility refers to A. satisfaction when consumers are not rational​, while cardinal utility is satisfaction when consumers are rational. B. an interpersonal comparison of​ satisfaction, while cardinal utility is a ranking of market baskets using arbitrary numerical values. C. a ranking of market baskets in order of most to least​ preferred, while cardinal utility indicates how much one market basket is preferred to another. D. a ranking of market baskets based on income​, while cardinal utility is a ranking of market baskets based on consumption. E. a ranking where the intensity of preferences is​ quantified, while cardinal utility is a number that by itself has no meaning.

Answer 1

I strongly believe that the correct answer is B. Im going to give an example. if we take into account a company like Honda produces 4000 units, for example Mercedes Benz produces 7000 units, this is very important for welfare economics which tries to put values on consumption.

Step-by-step explanation: