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Q: What is the difference between ordinalist and cardinalist?
A: Cardinal Approach to Utility : The Cardinalist school asserts that utility can be measured and quantified. It means, it is possible to express utility that an individual derives from consuming a commodity in quantitative terms. [ Thus, a person may express the utility he derives from consuming an apple as 10 utils or 20 utils.Moreover, it allows consumers to compare and define the difference in
utilities perceived in two commodites. Thus, it allows an individual to state that commodity A (accruing an utility of 20 utils) gives double the utility of commodity B ( which accrues an utility of 10 utils). Ordinal Approach to Utility : The ordinalist school asserts that utility cannot be measured in quantitative terms. Rather, the consumer can compare the utility accruing from different commodities (as a combination of them) and rank them in accordance with the satisfaction each commodity (or combination of commodities) gives him. Thus, the cardinal approach to the measurement of utility believes that utility derived from the consumption of a commodity can be expressed in quantitative terms. The ordinalist approach rejects this and states that the consumer at best can rank the various commodities (or combination of them) in accordance with the satisfaction that he expects from their consumption. ]
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User: What is the difference between ordinalist and cardinalist?

Weegy: Cardinal Approach to Utility : The Cardinalist school asserts that utility can be measured and quantified. It means, it is possible to express utility that an individual derives from consuming a commodity in quantitative terms. [ Thus, a person may express the utility he derives from consuming an apple as 10 utils or 20 utils.Moreover, it allows consumers to compare and define the difference in utilities perceived in two commodites. Thus, it allows an individual to state that commodity A (accruing an utility of 20 utils) gives double the utility of commodity B ( which accrues an utility of 10 utils). Ordinal Approach to Utility : The ordinalist school asserts that utility cannot be measured in quantitative terms. Rather, the consumer can compare the utility accruing from different commodities (as a combination of them) and rank them in accordance with the satisfaction each commodity (or combination of commodities) gives him. Thus, the cardinal approach to the measurement of utility believes that utility derived from the consumption of a commodity can be expressed in quantitative terms. The ordinalist approach rejects this and states that the consumer at best can rank the various commodities (or combination of them) in accordance with the satisfaction that he expects from their consumption. ]
cutyglyde|Points 263|

User: What is cardinalist approach consumer behaviour?

Weegy: Consumer Behavior from a Cardinalist and Ordinalist Approach Utility means satisfaction which consumers derive from commodities and services by purchasing different units of money.From Wikipedia, the free encyclopedia "Ineconomics, [ utility is a measure of satisfaction;it refers to the total satisfaction received by a consumer from consuming a good or service. "Given this measure, one may speak meaningfully of increasing or decreasing utility, and thereby explain economic behavior in terms of attempts to increase one's utility. Utility is often affected by consumption of various goods and services, possession of wealth and spending of leisure time. According to Utilitarian's, such as Jeremy Bentham (1748- 1832) and John Stuart Mill (1806-1873), theory "Society should aim to maximize the total utility of individuals, aiming for "the greatest happiness for the greatest number of people". Another theory forwarded by John Rawls (1921-2002) would have society maximize the utility of those with the lowest utility, raising them up to create a more equitable distribution across society. Utility is usually applied by economists in such constructs as the indifference curve, which plot the combination of commodities that an individual or a society would accept to maintain at given level of satisfaction. Individual utility and social utility can be construed as the value of a utility function and a social welfare function respectively. When coupled with production or commodity constraints, under some assumptions, these functions can be used to analyze Pareto efficiency, such as illustrated by Edgeworth boxes in contract curves. Such efficiency is a central concept in welfare economics.In finance, utility is applied to generate an individual's price for an asset called the indifference price. Utility functions are also related to risk measures, with the most common example being the entropic risk measure. ]
chamlin|Points 90|

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Asked 8/4/2013 11:38:33 PM
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