Difference Between Cardinal and Ordinal Utility

Utilitarianism is another theory in which its main objective is to explain the nature of ethics and morality. Utilitarianism is an ethical theory which is based upon utility, or doing that which produces the greatest happiness. According to a utilitarian the morality of act is found just if the consequence produces the greatest overall utility for everyone. However, if the greatest possible utility is not produced, the action is then morally wrong. This view says that a person should act as to produce the greatest overall happiness and pleasure for everyone who may be directly or indirectly affected by the action. Therefore, a utilitarian would require that for every action the corresponding consequences for every action should be thoroughly weighed and alternatives proposed before deciding whether or not to perform such an action.

Measurement that shows the order or rank of items. An example of ordinal could be ranking places in a contest, or test scores.

The action that leads to the greatest net outcome of utility is then considered to be the correct choice. According to this theory, Alistair should choose the action that will maximise happiness and minimise unhappiness.

Utilitarianism also known as the principle of utility is an ethical theory proposed by early philosophers. This theory implies that actions are only judged by its consequences whether they are good or bad. One should perform a particular action because it will yield the best results for all. This approach also analysis the cost and benefit relationship. The downfall with this theory is that not everyone benefits (Fremgen, 2016).

Ordinal data has the variables that include rank and satisfaction. An everyday example of ordinal data can be surveys.

This sense of technology is taking over our lives and turning us into couch potato zombies with no active lifestyle because all we want to do is dwell on the internet and social media networks. For example, years ago there were no television ads, cellphones, or computers to stimulate our senses. Now that we do have all that, we are taking advantage of our products and economy, whether we see it and believe it or not. These things are unnecessary for standard living but now the upcoming generations depend on these products to function and live through life. On the other hand, without consumers buying products and manufacturers making these products, our economy would no longer exist. That is the belief that consumer satisfaction is that the economy is fundamentally ruled by consumer desires is called consumer sovereignty. Consumer sovereignty is the idea that consumers’ needs and wants determine the shape of all economic activities. Therefore, consumer sovereignty is the fundamental mechanism that guides economies.

The third principle of individual economic decision-making relates to marginal decision-making. Rational people will think at the marginal level, making small changes or tweaks in their plans to achieve the desired objective. Rational people normally have a certain system or method he/she uses to achieve their objective and they understand that sometimes small changes must be made to accomplish this.

being “what customers get from the purchase and use of a product versus what they

This P talks about the product as a whole, as what is consumed by the end consumer.

Consumption can be illustrated in different ways, but is usually best defined as the final purchase of goods and services by individuals. Consumer behavior is the study of how people make decisions which they

The theory of Utilitarianism states that actions should be judged as right or wrong depending on whether they cause more happiness or unhappiness. It weighs the rightness and wrongness of an action based on consequences of that action.

This theory advocates that the actions worth is determined by maximizing utility (pleasure or happiness).it looks at the consequence of an action as to whether the outcome is good to the majority of people affected by it. According to Bentham, utilitarianism is the greatest happiness or greatest felicity principle. There are many types of this theory which include act vs. rule, two level, motive, negative and average vs. total. (Clifford G., John C. 2009) In act utilitarianism, when people have to make choices, they should consider the consequences of each choice and then choose that which will generate much pleasure.

Marginal Utility by definition is the additional satisfaction a consumer gains from consuming one more unit of a good or service, which is usually positive, but can be negative. The concept implies that the utility or benefit to a consumer of an additional unit of a product is inversely related to the number of units of that product he already owns. The notion of marginal utility originated with attempts by 19th-century economists to examine and describe the economic validity of price. They believed price was partially determined by a commodity’s utility, which led to a paradox when applied to predominant price associations. This problem, commonly referred to as the

The definition of Zeithaml & Bitner (2003) is slightly different from that of Thomassen: “Satisfaction is the consumer fulfilment response. It is a judgement that a product or service feature, or the product of service itself, provides a pleasurable level of consumption-related fulfilment.” The emphasis of Zeithaml & Bitner is thus on obtaining a certain satisfaction in relation to purchasing

Once there is the decision to consume or purchase good s or services the common factor then becomes the need for that product which is at times evaluated based on attainability and price. In many situations if consumers are not motivated by the need to purchase then the possibility lies that they will not purchase. There may be different justifications that consumers internalize when making the decision to purchase a particular product at its given price. Different decisions supports the need to purchase a product such as