Question

WHAT ARE THE LIMITATION OF CARDINALIST THEORY

Answer 1

Explanation:

• The limitation of cardinal utility analysis is the difficulty in assigning numerical value to a concept of utility.
• Utility is comparable on a scale, but not easily quantifiable.
• In other words, the utility of a good or service cannot simply be measured in numbers in order to determine its economic value.

Answer 2

Cardinal efficiency is the value with which customers' happiness with the purchase of products or services may be numerically calculated

Explanation:

• The drawback in an study in cardinal efficiency is the complexity in applying numerical meaning to an efficiency term.
• Utility is equivalent, but not readily quantifiable on a scale.
• In other terms, the utility of a product or service can not be calculated solely in statistics to assess its economic worth.
• Market behavior analysis explores how a customer uses his money in order to gain the highest happiness or benefit.
• The Cardinalist school argues that usefulness can be calculated and quantified whereas the school believes that usefulness can not be assessed in quantitative terms.