The key assumption that accompanies the use of numbers for measuring utility is that:
A) utility cannot be measured by an outside party.
B) utility can be perfectly measured.
C) individuals choose based on their preferences.
D) people make consumption decisions.

Question

Quizplus · Accepted Answer

The key assumption for using numbers to measure utility is that individuals make choices based on their preferences. This assumption allows for the quantification of utility based on the choices individuals make, reflecting their subjective valuation of different options.

The Key Assumption That Accompanies the Use of Numbers for Measuring