Concept:Ordinal utility theory states that satisfaction cannot be measured in absolute units, but can only be ordered or ranked.
Explanation:The ordinalist approach, developed by Hicks and Allen, postulates that utility is subjective and unmeasurable.
A consumer cannot assign exact numerical values, like utils, to the satisfaction obtained from goods.
Instead, the consumer can only rank different bundles of goods in order of preference.
For example, a consumer can say that bundle
A is preferred to bundle
B, but cannot say that bundle
A gives exactly twice the satisfaction of bundle
B.
This ranking of preferences is illustrated using indifference curves and budget lines.
Therefore, the ordinalist approach holds that utility can be ranked, not measured quantitatively.
Answer:A. Rank