Criticize The Classical Or Marshallian Approach?
Answer:
The proponents of cardinal utility are of the view that what so ever was the satisfaction a consumer derive from any commodity can be measured into numbers prearranged as utile. Moreover utilities can be added etc, but Hicks and pioneer approach rejects such propositions. He and the other neo-classical are of the opinion that utility is a subjective phenomenon. Moreover a consumer does not possess any utilometer to measure the satisfaction. This is the root they think that utility can be ranked, which combination of two goods grant a consumer equal, more or less satisfaction. Accordingly, the method of ranking the utility seems to be more plausible later measuring it.
The classical approach of consumer equilibrium rest upon the assumption of constancy of MU of money this is the reason the Marshallian demand approach fail to distinguish between the two components of PE, SE and IE.While in the ordinal approach not only SE of price fall but IE of price go down is also considered when IE of price change is included it means that because of fall contained by price of good consumer real income has increased. As a result he will know how to purchase more of cheaper good. Accordingly in such situation MU of money will not remain constant.
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