Three of the following belong to cardinal utility analysis. Which one is the odd one out?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Indifference curve
Cardinal utility analysis measures utility in numbers, through total utility and marginal utility. Ordinal utility analysis only ranks bundles, and uses indifference curves.
Option (1) Total utility — True. One of the two measures of utility.
Option (2) Law of diminishing marginal utility — True. It works with marginal utility in numbers.
Option (3) Marginal utility — True. The other measure of utility.
Option (4) Indifference curve — False. It joins bundles the consumer ranks as equal, with no numbers for utility.
NCERT (2026-27): “2.1.1 Cardinal Utility Analysis Cardinal utility analysis assumes that level of utility can be expressed in numbers. For example, we can measure the utility derived from a shirt and say, this shirt gives me 50 units of utility. Before discussing further, it will be useful to have a look at two important measures of utility.” “2.1.2 Ordinal Utility Analysis … In other words, the consumer does not measure utility in numbers, though she often ranks various consumption bundles. This forms the starting point of this topic – Ordinal Utility Analysis. … Such a curve joining all points representing bundles among which the consumer is indifferent is called an indifference curve. …” |