A consumer is observed making two choices. First, he faces prices p = (1,3) with wealthw = 8 but is limited to purchasing no more than 3 units of good 1. Given this budget set, hechooses the bundle x = (2, 2). Second, he faces prices p' = (2,1) and wealth w' = 8 with nolimit on his purchases of either good. Given this budget set, he chooses the bundle 2' = (4,0).dentify all revealed preferences given these choices.Do this consumer's choices satisfy the Weak Axiom of Revealed Preference?- Could these choices result from the consumer choosing optimally given some mono-tone, convex, and continuous preferences? Explain your answer carefully; you do nothave to provide a formal proof.

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A consumer is observed making two choices. First, he faces prices p = (1,3) with wealth w = 8 but is limited to purchasing no more than 3 units of good 1. Given this budget set, he chooses the bundle x = (2,2). Second, he faces prices p' = (2, 1) and wealth w' = 8 with no limit on his purchases of either good. Given this budget set, he chooses the bundle x² = (4,0). dentify all revealed preferences given these choices. Do this consumer's choices satisfy the Weak Axiom of Revealed Preference? - Could these choices result from the consumer choosing optimally given some mono- tone, convex, and continuous preferences? Explain your answer carefully; you do not have to provide a formal proof.

A consumer is observed making two choices. First, he faces prices p = (1,3) with wealth w = 8 but is limited to purchasing no more than 3 units of good 1. Given this budget set, he chooses the bundle x = (2,2). Second, he faces prices p' = (2, 1) and wealth w' = 8 with no limit on his purchases of either good. Given this budget set, he chooses the bundle x² = (4,0). dentify all revealed preferences given these choices. Do this consumer's choices satisfy the Weak Axiom of Revealed Preference? - Could these choices result from the consumer choosing optimally given some mono- tone, convex, and continuous preferences? Explain your answer carefully; you do not have to provide a formal proof.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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