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Write down the drawbacks of cardinal utility analysis.

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Write down the drawbacks of cardinal utility analysis.

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Three drawbacks of cardinal utility analysis are:

  1. Cardinal measurability of utility is unrealistic.
  2. Hypothesis of independent utilities is wrong.
  3. Assumption of constant cardinal utility of money is not valid.
  4. Marshallian Law of Demand cannot genuinely be derived except in a one-commodity case.
  5. Cardinal utility analysis does not split up the price effect into substitution and income effects.
  6. Marshall could not explain Giffen Paradox.
  7. Cardinal utility analysis assumes too much and explains too little.
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