Multiple choice

Which of the following is not necessary for cardinal utility theory?

  1. Rationality of the consumer

  2. Constant marginal utility of money

  3. Perfectly competitive market

  4. Additivity of utility

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Perfect competition is not necessary for cardinal utility theory. Cardinal utility depends more on consumer preferences, satisfaction, etc.

Keep practicing — related questions