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2. A consumer's preferences rank three good baskets (A, B and C) as follows: - A is at least as good as B. - B is at least as good as C. From these rankings, an economist concludes that basket A is at least as good as basket C. What does the economist assume about preferences? a) They are complete. c) They display local non-satiation (more-is-better). b) They are transitive. d) Marginal utility is decreasing.

2. A consumer's preferences rank three good baskets (A, B and C) as follows: - A is at least as good as B. - B is at least as good as C. From these rankings, an economist concludes that basket A is at least as good as basket C. What does the economist assume about preferences? a) They are complete. c) They display local non-satiation (more-is-better). b) They are transitive. d) Marginal utility is decreasing.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. A consumer's preferences rank three good baskets (A, B and C) as follows: - A is at least as good as B. - B is at least as good as C. From these rankings, an economist concludes that basket A is at least as good as basket C. What does the economist assume about preferences? a) They are complete. c) They display local non-satiation (more-is-better). b) They are transitive. d) Marginal utility is decreasing. 3. A consumer is observed to display the following: MUX MUy P Py MU: and MUy are the marginal utilities from goods X and Y, respectively. Px and Py are the prices of goods x and y. To increase utility, what should the consumer do? a) Decrease the price of good x c) Increase consumption of good y b) Increase the price of good y d) Decrease consumption of good y
Transcribed Image Text:2. A consumer's preferences rank three good baskets (A, B and C) as follows: - A is at least as good as B. - B is at least as good as C. From these rankings, an economist concludes that basket A is at least as good as basket C. What does the economist assume about preferences? a) They are complete. c) They display local non-satiation (more-is-better). b) They are transitive. d) Marginal utility is decreasing. 3. A consumer is observed to display the following: MUX MUy P Py MU: and MUy are the marginal utilities from goods X and Y, respectively. Px and Py are the prices of goods x and y. To increase utility, what should the consumer do? a) Decrease the price of good x c) Increase consumption of good y b) Increase the price of good y d) Decrease consumption of good y
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