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Under the cardinal utility approach, utility is assumed to be measured in hypothetical units called:
Aranks
Butils
Crupees
Dindices
Answer & Solution
Correct answer: B. utils
1. Marshall and other neo-classical economists used a psychological unit called the util.
2. Cardinal measurability means utility can be assigned numbers like 1, 2, 3 utils.
3. Money is treated only as a measuring rod, and ranking belongs to the ordinal approach, so the other options are wrong.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit II "Theory of Consumer Behaviour", p.3_
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