Which one of the following assumptions of Pigouvian welfare economics does NOT hold true?
Ordinal rather than cardinal utility is not a Pigouvian assumption. Pigouvian welfare analysis uses cardinal utility and interpersonal comparisons, together with diminishing…
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Which one of the following assumptions of Pigouvian welfare economics does NOT hold true?
Answer and explanation
Correct answer C
Ordinal rather than cardinal utility is not a Pigouvian assumption. Pigouvian welfare analysis uses cardinal utility and interpersonal comparisons, together with diminishing marginal utility of income.
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Gujarat SET (GSET)