Ratings and Rankings on Utility

Consumers are assumed to be rational. He is the ultimate person who consumes the goods or services which is also called as utility of the goods by using income and commodity prices. To understand the behaviour of consumers there are several theories that are developed. There are mainly two types of utilities are there. They are 1) Cardinal Utility
                                            2)Ordinal Utility

Cardinal Utility :
1) Cardinal utility is also called as Utility Analysis.
2) It enables customers to rate the magnitude of how much they prefer one good to another.
3)  Giving different choices a specific utililty value.
4) It is all about ratings.
5) It gives a value to different options.
6) Measuring values to satisfaction.
7) It is less realistic.
8)Here utility is measured in 'UTILS'.
9) It is quantitative.
      Example : Smitha yields 90 utils on icecreams and 30 utilis on cake.
Ordinal Utility :
1) Ordinal utility is also called as Indifference curve utility.
2) It doesnot try to give the magnitude of how much a consumer prefers a good.
3) Ranking choices by order of preference.
4) It is about rankings.
5) It ranks in terms of preferences.
6)Cannot measure the satisfaction.
7) It is more realistic.
8) Here utility is based on satisfaction.
9) It is qualitative.
         Example : Smita likes icecreams more than cakes.