Concept:Ordinal utility theory explains consumer preference by ordering choices instead of assigning numerical satisfaction levels.
Explanation:Under ordinal utility theory, a consumer is only expected to state which combination of goods gives more satisfaction.
The consumer may say that bundle
X is preferred to bundle
Y.
However, the consumer cannot say that bundle
X gives twice the satisfaction of bundle
Y.
Therefore, utility is ranked, not measured in exact units.
The theory assumes that choice is consistent, so option A is incorrect.
It does not assume total utility is a function of price, so option C is incorrect.
It also rejects the idea that satisfaction is measurable in cardinal units, so option D is incorrect.
This leaves ranking as the central assumption of ordinal utility theory.
Answer:The correct option is B: utility can be ranked.