Q.Write a short note on: Ordinal utility

Ordinal utility is the idea that satisfaction cannot be measured in absolute (cardinal) numbers but can only be ranked in order of preference. It is the foundation of the indifference curve analysis of Hicks and Allen. ## Meaning Ordinal utility holds that utility is a psychological feeling that cannot be measured in exact units. A consumer cannot say that one good gives him '10 units' and another '20 units' of utility; he can only rank his preferences — for example, he can say he prefers combination A to combination B, or that he is indifferent between them. This approach was developed by J. R. Hicks and R. G. D. Allen as an improvement over the cardinal (measurable) utility approach of Marshall. Because utility is only ranked, the ordinal approach uses indifference curves — curves joining combinations that give equal satisfaction — to explain consumer behaviour. …