in cardinal utility analysis marginal utility of the unit of a commodity is (less then , equal to, grether then)
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Answer:
Which of the following points does not lie on the line 3x + 5y =20 ?
Answer:
This theory states that utility is a cardinal concept. In other words, it is measurable and quantifiable. Hence, you can say that you derive a utility of 10 units from consuming 1 unit of commodity A and 5 from consuming 1 unit of commodity B. This can help you compare different commodities and analyze which commodity offers better utility or satisfaction.
The theory further states that money is the measuring rod of utility. So, the amount of money that you are willing to spend for a unit of commodity rather than going without it is the measure of utility that you derive from the said commodity.
2] The constancy of the Marginal Utility of Money
The second assumption is that when you are spending money on a commodity, the marginal utility of money remains constant throughout. This facilitates the measurement of the utility of commodities in terms of money.