ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!


    тЪб Month End Offer - Flat 52% Off On All Courses! Enroll Now тЪб
    00:00:00 AM Left

    Question

    Which of the following is an assumption of Ordinary

    Utility Theory?
    A Cardinal measurability of utility Correct Answer Incorrect Answer
    B Diminishing marginal utility of money Correct Answer Incorrect Answer
    C Rational behaviour of the consumer Correct Answer Incorrect Answer
    D Interpersonal comparability of utility Correct Answer Incorrect Answer

    Solution

    A key assumption of Ordinary Utility Theory is the rational behaviour of the consumer. This implies that consumers make choices to maximize their utility, given their preferences and budget constraints, and their preferences are complete and transitive.

    Practice Next
    More Research Questions
    ask-question