Topic Content:
- Basic Concept of Economics
- Scale of Preference
- Importance of Scale of Preference
- Advantages of Scale of Preference
4. Scale of Preference:
This refers to a list of an individual’s wants, in order of their relative importance. In other words, it refers to a list of wants of an individual, firm, or government, arranged in order of priority, starting from the most important to the least.
Scale of preference helps the various economic units to make rational choices and to maximize utilitythe state of being useful, profitable, or beneficial. More (usefulness) since it would enable them to choose their most pressing wants first.
For example, a student who is in need of a laptop, bag, biro, shoes, trousers, shirts, exercise books, etc., but with limited resources, may draw his scale of reference like this:
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This is the best study group so far…
Kudos to the initiator