Cardinal Utility Analysis/ Approach
Definition and Explanation:
Human wants are unlimited and they are of different intensity.
The means at the disposal of a man are not only search but they have alternative uses. As a result of scarcity of recourse, the consumer cannot satisfy all his wants. He has to choose as to which want is to be satisfied first and which afterward if the recourses permit. The consumer is confronted in making a choice.
For example, a man is thirsty. He goes to the market and satisfies his thirst by purchasing coca cola instead of tea. We are here to examine the economic forces which make him purchase a particular commodity. The answer is simple. The consumer buys a commodity because it gives him satisfaction. In technical term, a consumer purchases a commodity because it has utility for him. We now examine the tools which are used in the analyzes of consumer behavior.