A utility function describing by how much one market basket is preferred to another is called:
A) a cardinal utility function.
B) an ordinal utility function.
C) either an ordinal or a cardinal function. Both types of functions use this ranking.
D) neither an ordinal nor a cardinal function. Neither type uses this ranking.

Question

Quizplus · Accepted Answer

A cardinal utility function measures the degree of preference between different market baskets, indicating by how much one is preferred over another.

A Utility Function Describing by How Much One Market Basket