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Question
Which of the following are the correct assumptions for the utility approach?
Options
Prices of commodities are given and continue to change.
Consumer's income is given.
Utility is not measurable in monetary terms
All of the above
MCQ
Solution
Consumer's income is given.
Explanation:
The utility approach implies that commodity prices and consumer income are fixed and will not change, and that utility is a quantifiable concept. As a result, of the above assumptions, the only one that holds true is that
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Cardinal Approach (Utility Analysis)
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