What do we assume regarding numbers in basic economic principles?

In basic economic principles, the assumption is that numbers are cardinal. This means that the numbers represent magnitudes that allow for comparisons of size and quantity. Cardinal numbers enable economists to understand not only that one quantity is different from another, but how much different they are. For example, if you have 10 apples and 5 apples, the cardinal approach allows you to quantify that there are 5 more apples in the first case, which is critical for making decisions regarding allocation of resources, production levels, and consumption choices.

Understanding figures as cardinal is fundamental in fields such as utility theory, where it might be necessary to evaluate individual preferences and choices based on measurable quantities. In economic models, this cardinality allows for clear interpretations of data and enhances the ability to create mathematical representations of economic phenomena.

The other contexts provided by the choices do not align with this foundational assumption as effectively. While it might be tempting to think of numbers as complex or arbitrary, those states would complicate the clarity needed in economic analysis. If numbers were deemed irrelevant, very little could be quantitatively analyzed, which would hinder the application of economic principles completely. Thus, the cardinal nature of numbers is integral to the field of economics, allowing for accurate measurement and comparison.