John and Sally have identical preferences except that Sally's utility is exactly 10 times John's for each basket of goods. If they have the same income and face the same prices
A) Sally will consume 10 times the amount that John consumes.
B) Sally will receive 1/10 the satisfaction of John.
C) both will consume the same amount of all goods.
D) John and Sally will have equal total utility.

Question

Quizplus · Accepted Answer

Utility functions are ordinal, not cardinal, meaning they reflect preference order rather than magnitude. Thus, despite Sally's utility being 10 times John's, they will consume the same amount of goods if they have the same income and face the same prices.

John and Sally Have Identical Preferences Except That Sally's Utility