Consider the following table which shows a consumer's amount of expenditure on 3 different bundles, A, B and C and at 3 different price ratios, X, Y and Z. Assume that bundle A is purchased at prices X; bundle B is purchased at prices Y; bundle C is purchased at prices Z. Row 1 Row 2 Row 3 Prices Prices X (1,1) Prices Y (1, 2) Prizes Z (2,1) Column 1 Bundle A 6 9 9 Column 2 Bundle B 4 7 Column 3 Bundle 5 8 7 Given the consumer's choices, we can use the table to determine whether this consumer's preferences are rational by adding an asterisk (*) to those bundles which are less preferred to the purchased bundle. We can then determine if their preferences violate the weak axiom of revealed preference. Into which row/column combination would you need to add an asterisk (*) to indicate he preference relation? O Only Row 3 Column 2 O Only Row 1 column 2; Row 1 column 3; Row 3 column 2 O Only Row 1 column 3 and Row 3 column 2 O Only Row 1 column 2 and Row 1 column 3 O Only Row 1 column 2: Row 1 column 3: Row 4 column 1: Row 3 column 2
Consider the following table which shows a consumer's amount of expenditure on 3 different bundles, A, B and C and at 3 different price ratios, X, Y and Z. Assume that bundle A is purchased at prices X; bundle B is purchased at prices Y; bundle C is purchased at prices Z. Row 1 Row 2 Row 3 Prices Prices X (1,1) Prices Y (1, 2) Prizes Z (2,1) Column 1 Bundle A 6 9 9 Column 2 Bundle B 4 7 Column 3 Bundle 5 8 7 Given the consumer's choices, we can use the table to determine whether this consumer's preferences are rational by adding an asterisk (*) to those bundles which are less preferred to the purchased bundle. We can then determine if their preferences violate the weak axiom of revealed preference. Into which row/column combination would you need to add an asterisk (*) to indicate he preference relation? O Only Row 3 Column 2 O Only Row 1 column 2; Row 1 column 3; Row 3 column 2 O Only Row 1 column 3 and Row 3 column 2 O Only Row 1 column 2 and Row 1 column 3 O Only Row 1 column 2: Row 1 column 3: Row 4 column 1: Row 3 column 2
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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4 Can you help me with this question? Thanks.
![Consider the following table which shows a consumer's amount of expenditure on 3 different bundles, A, B and C and at 3 different price ratios, X, Y and Z. Assume that bundle A is purchased at
prices X; bundle B is purchased at prices Y; bundle C is purchased at prices Z.
Row 1
Row 2
Row 3
Prices
Prices X (1,1)
Prices Y (1, 2)
Prizes Z (2,1)
Column 1
Bundle A
6
9
9
Column 2
Bundle B
4
5
7
Column 3
Bundle C
5
7
Given the consumer's choices, we can use the table to determine whether this consumer's preferences are rational by adding an asterisk (*) to those bundles which are less preferred to the
purchased bundle. We can then determine if their preferences violate the weak axiom of revealed preference. Into which row/column combination would you need to add an asterisk (*) to indicate
the preference relation?
O Only Row 3 Column 2
O Only Row 1 column 2; Row 1 column 3; Row 3 column 2
O Only Row 1 column 3 and Row 3 column 2
O Only Row 1 column 2 and Row 1 column 3
O Only Row 1 column 2; Row 1 column 3; Row 4 column 1; Row 3 column 2
O No answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a74cc06-2334-4aa4-818a-1c47667188a1%2F3db0f8e4-8ab1-45f1-a551-736043fd7ad7%2F50nnw1a_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the following table which shows a consumer's amount of expenditure on 3 different bundles, A, B and C and at 3 different price ratios, X, Y and Z. Assume that bundle A is purchased at
prices X; bundle B is purchased at prices Y; bundle C is purchased at prices Z.
Row 1
Row 2
Row 3
Prices
Prices X (1,1)
Prices Y (1, 2)
Prizes Z (2,1)
Column 1
Bundle A
6
9
9
Column 2
Bundle B
4
5
7
Column 3
Bundle C
5
7
Given the consumer's choices, we can use the table to determine whether this consumer's preferences are rational by adding an asterisk (*) to those bundles which are less preferred to the
purchased bundle. We can then determine if their preferences violate the weak axiom of revealed preference. Into which row/column combination would you need to add an asterisk (*) to indicate
the preference relation?
O Only Row 3 Column 2
O Only Row 1 column 2; Row 1 column 3; Row 3 column 2
O Only Row 1 column 3 and Row 3 column 2
O Only Row 1 column 2 and Row 1 column 3
O Only Row 1 column 2; Row 1 column 3; Row 4 column 1; Row 3 column 2
O No answer
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