In the cardinal utility approach, presented by Alfred Marshall, the size of the utility difference between two bundles of goods carries some significance. In other words, this approach attaches a significance to the magnitude of utility. There is a very simple way of assigning an ordinal utility to the two bundles of goods- we just […]
Cardinal Utility Approach and Its Irrelevance | Microeconomics
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How Utility Maximisation Yields Optimal Choices? | Microeconomics
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Glance over the below given article to get an idea about how utility maximisation subject to a budget constraint yields optimal choices. Introduction to Optimal Choice: Optimisation in consumption occurs when a consumer’s desire to buy consumption goods coincides with his capacity to do so. Since preferences are assumed to be well-behaved and more is […]
How to Estimate Consumer Utility? | Consumer Behaviour | Microeconomics
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Glance over the below given article to get an idea about how to estimate consumer preferences or utility from observed demand behaviour. Demand for a Discrete Good: Let us suppose the utility function takes the form v(x) + y and that the good x is available only in integer amounts, not infractions. Here y is […]