The correct answer is: A. assumption of the rationality of the consumer’s behaviour
Ordinal utility analysis is a theory of consumer behavior that assumes that consumers are rational and that they make choices that maximize their utility. This means that consumers will always choose the bundle of goods that gives them the most satisfaction, given their budget constraints.
Cardinal utility analysis, on the other hand, is a theory of consumer behavior that assumes that consumers can assign numerical values to their utility. This means that consumers can say that they prefer one bundle of goods to another by saying that they get more utility from the first bundle than from the second.
Ordinal utility analysis is considered superior to cardinal utility analysis because it is more realistic. It is difficult to measure utility, and it is not clear that consumers actually do assign numerical values to their utility. Ordinal utility analysis, on the other hand, does not require consumers to assign numerical values to their utility. It only requires consumers to rank bundles of goods in order of preference.
B. possibility of the derivation of the consumer’s demand: This is a feature of both ordinal and cardinal utility analysis.
C. bifurcation of price effects into income and substitution effects: This is a feature of cardinal utility analysis, but not of ordinal utility analysis.
D. consideration of the available limited resources for satisfying consumer’s demand: This is a feature of both ordinal and cardinal utility analysis.