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- Economists use a preference map to illustrate that A. preferences are complete. B. preferences are transitive. C. more is better than less. D. All of the above.So is this an example of: hometheic preferences, quasilinear preferences, or revealed preferences?Muoki says, “I’d rather see an action movie than a comedy, and I’d rather see a comedy than a foreign film. But given the choice, I think I’d rather see a foreign film than an action movie. Which of these statements about individual preferences is violated?A. Muoki’s preference ordering is completeB. Muoki’s indifference curves are convex to the originC. Muoki’s indifference curves are negatively slopedD. Muoki’s preferences are transitive
- The non-satiation assumption we make about people's's preferences entails that the indifference curves never cross. True or FalseWe claimed in the text that if preferences were monotonic, then a diag-onal line through the origin would intersect each indifference curve exactly once. Can you prove this rigorously? (Hint: what would happen if itintersected some indifference curve twice?)The assumption of completeness of preferences states that _____. a. more of a good is always better b. consumers have consistent preferences c. consumers are rational when making choices d. a consumer can rank all possible consumption bundles
- 7.A college football coach says that given any two linemen A and B, he always prefers the one who is bigger and faster. Is this preference relation transitive? Is it complete? 8.Explain why convex preferences means that “averages are preferred to extremes. 9.If good 1 is a “neutral,” what is its marginal rate of substitution for good 2?Think of some other goods for which your preferences might be concave.Which of the following statements captures the meaning of transitivity of preferences?a. If A is preferred to B, then B is less preferred than A.b. If A is preferred to B, and B is preferred to C, then A is preferred to C.c. If A is preferred to B and B is preferred to C, then the preference for A over B is stronger than the preferencefor B over C.d. If A is preferred to C, then there exists B such that A is preferred to B and C is preferred to A.
- Could Figure 3.2 be a single indifference curve if preferences are monotonic?Which form of utility is expressed on ranking the bundles According to preferencesReese thinks peanut butter and chocolate are great when separate, but when they combine they are even more epic. In other words, Reese likes to eat either peanut butter or chocolate, but when he eats them together, he gets additional satisfaction from the combination. His preference over peanut butter (x) and chocolate (y) is represented by the utility function: u(x, y) = xy + x + y Which of the following is NOT true about Reese’s preference? (a) The MRS decreases when x increases.(b) The preferences are homothetic.(c) The marginal utility of y is higher when x = 10 than when x = 5.(d) For any a > 0, Reese prefers the bundle (x =a/2 , y = a/2 ) over either the bundle (x = a, y = 0) or (x = 0, y = a).
