Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Rita had a happy meal at Mc Donald's in the morning. In the afternoon, on the same day, she ate North Indian Thali at Haldirams. When she came home, her sister asked what she liked the most. Rita replied by saying that she got more satisfaction from eating the North Indian Thali, thereby giving rank 1 to the North Indian Thali and rank 2 to McDonalds.
In this scenario, how is the utility expressed?

Options:

Cardinal

Ordinal

Bi-cardinal

Other

Correct Answer:

Ordinal

Explanation:

Rita is talking about ordinal utility. In real life, we never express utility in the form of numbers. At the most, we can rank various alternative combinations in terms of having more or less utility. In other words, the consumer does not measure utility in numbers, though she often ranks various consumption bundles.