Difference between Cardinal Utility and Ordinal Utility ? (3)
Difference between Voluntry Unemployment and Involuntry Umemployment (3)
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Ans1.
Basis of Difference | Cardinal Utility | Ordinal Utility |
Valuation of satisfaction | According to the cardinal utility, the satisfaction derived from the consumption of a particular good and service can be measured in absolute numbers. | According to the ordinal utility, the satisfaction derived from the consumption of a particular good and service cannot be measured in absolute numbers. |
Measurement of satisfaction | Cardinal utility measures satisfaction in terms of utils. | Ordinal utility measures satisfaction in terms of ranks. |
Measuring order | Under cardinal utility, the consumption of goods and services providing higher satisfaction are accorded higher utils. | Under ordinal utility, the consumption of goods and services providing higher satisfaction are accorded higher ranks. That is the consumption providing highest satisfaction is accorded first rank. |
Example | For example, utility derived from the consumption of a glass of milk is 3 utils. | For example, a glass of milk is ranked 1st while a glass of soda is ranked 2nd. |
Ans 2.
Voluntary Unemployment | Involuntary Unemployment |
Voluntary unemployment refers to a situation where a person who is able to work remains unemployed due to his/her own willingness. | Involuntary unemployment refers to a situation where a person who is willing and is able to work does not get work at the existing wage rate. |
Under this situation, the person remains unemployed despite jobs being available in the market. | Under this situation, the person remains is unemployed due to non-availability of jobs in the market. |