Question

Difference between cardinal and ordinal approach

Answer 1

Cardinal Approach                                       Ordinal Approach

i) Developed by Marshall                         i) Developed by Hicks and Allen

ii) Satisfaction can be measured by      ii) Satisfaction can be measured by quantitative terms ( 1,2,3,4 )                 cannot be measured in quantitative term

iii) Measured by utils                              iii) Measured by ranks

iv) Only one good at a time                   iv) Combinations of goods

v) Based on marginal utility analysis     v) Based on indifference analysis