The key assumption that accompanies the use of numbers for measuring utility is that:

• A. individuals can rank their preferences and assign consistent numerical values to different bundles
• B. utility is always maximized when income is maximized
• C. utility is independent of the choices available to the consumer
• D. utility can be measured in absolute terms and compared across individuals

Answer: (A)

Verified step by step guidance

1. Understand that utility in microeconomics represents the satisfaction or happiness a consumer derives from consuming goods or services.
2. Recognize that to use numbers for measuring utility, we need a way to assign numerical values to different bundles of goods that reflect the consumer's preferences.
3. The key assumption is that individuals can rank their preferences consistently, meaning if bundle A is preferred to bundle B, and bundle B to bundle C, then A is preferred to C (transitivity).
4. This assumption allows us to assign numerical values to these bundles such that higher numbers correspond to more preferred bundles, enabling us to measure utility ordinally.
5. Note that this does not require utility to be measured in absolute terms or compared across individuals, but only that each individual can assign consistent numbers to their own preferences.