In defining preference relations over consumption bundles, we require the assumptions of completeness and transitivity. Draw a diagram indicating a situation in which the assumption of transitivity of preferences fails. Explain briefly why you consider that this would be problematic for a consumer. Can you think of a circumstance in real life where the transitivity assumption might not hold?

In defining preference relations over consumption bundles, we require the assumptions of completeness and transitivity. Draw a diagram indicating a situation in which the assumption of transitivity of preferences fails. Explain briefly why you consider that this would be problematic for a consumer. Can you think of a circumstance in real life where the transitivity assumption might not hold?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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