Question : Who has given ordinal utility theory?
Option 1: Alfred Marshall
Option 2: AC Pigou
Option 3: Hicks and Allen
Option 4: David Ricardo
Correct Answer: Hicks and Allen
Solution :
The ordinal approach to utility analysis was introduced by Hicks and Allen. The term "neo-classical economists" refers to them. According to ordinal theory, utility can only be ranked or ordered; it cannot be quantified in numerical terms.
Hicks and Allen were British economists who collaborated with each other to develop the theory of ordinal utility in 1934. The theory describes that the consumer derives utility as high or low when they take rational decisions while purchasing a commodity. This approach of ordinal utility established the concept of indifference curve analysis.
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