Saturday, April 11, 2020

Types of Utility

Cardinal Utility: 
It gives numbers 1,2,3,.... It assumes that utility can be measured and utility from the two  i commodities can be compared. For eg. Let's take two commodities orange and apple. Orange gives utility of 20 units where as apple gives utility of 10 units. Orange is giving 2 X  more utility as compared to apples.

Ordinal Utility: 
The consumer gives order or rank to the utility. It does not give numbers but order, for eg , 1st, 2nd,3rd........etc. It gives the preference of the consumer when he ranks commodities according to the utility derived.

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