Glossary · Micro · Consumer theory

Ordinal vs cardinal utility

Ordinal utility only ranks bundles (this one is better than that one). Cardinal utility would also say by how much. Modern consumer theory needs only the ranking, so the numbers on indifference curves are labels, not measurements.

Also called: cardinal utility

Taught in: Ranking Bundles

Related terms

Utility Indifference curve

More from consumer theory

Axioms of consumer preference Budget line Corner solution Engel curve Giffen good Marginal rate of substitution (MRS)Marginal utility (MU)

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