Toni only consumes two commodities, x1 and x2. Her preferences are well-behaved
ID: 1222853 • Letter: T
Question
Toni only consumes two commodities, x1 and x2. Her preferences are well-behaved and so are consistent with completeness, transitivity, continuity, monotonicity, and convexity. She is indifferent between the bundles (2,6) and (6,2). What is the most you can say about Toni’s preferences over commodity bundles (1, 5) and (5, 4)?
(5, 4) is strictly preferred to (1, 5)
(5, 4) is weakly preferred to (1, 5).
(5, 4) is indifferent to (1, 5).
(1, 5) is strictly preferred to (5, 4)
(1, 5) is weakly preferred to (5, 4)
(5, 4) is strictly preferred to (1, 5)
(5, 4) is weakly preferred to (1, 5).
(5, 4) is indifferent to (1, 5).
(1, 5) is strictly preferred to (5, 4)
(1, 5) is weakly preferred to (5, 4)
Explanation / Answer
Toni only consumes two commodities, x1 and x2. Her preferences are well-behaved and so are consistent with completeness, transitivity, continuity, monotonicity, and convexity. She is indifferent between the bundles (2,6) and (6,2). What is the most you can say about Toni’s preferences over commodity bundles (1, 5) and (5, 4)-
-(5, 4) is strictly preferred to (1, 5).
Explanation-For both goods (5,4) combination gives best option for both goods rather than (1,5).