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Market Demand Curve 12 Quenty Demanded Fon Nam Markat Demand Price 10 Yeg Som Gob Yam 10 2. 4. 4. 1. 1. 1. 21 26 20 30 40 4. 10 10 10 12 11 10 48 6. Market Demand 10 20 50 60 The first unit of the good that Ying consumes is worth $1 to her. The 4th unit of the good Som consumes is worth $4 to her. The 5th unit of the good Fon consumes is worth less than $6 to her. When the price drops from $8 to $7, Yam's demand increases from 2 to 4 units. This reveals the 3rd and 4th unit of the good she consumes are not worth $7 each to her. Because demand st $10 is O units, no one in this market is voluntarily willing to give up $10 to buy a unit of the good. This means that noone values consumption of the good at more than $10 per unit.

Market Demand Curve 12 Quenty Demanded Fon Nam Markat Demand Price 10 Yeg Som Gob Yam 10 2. 4. 4. 1. 1. 1. 21 26 20 30 40 4. 10 10 10 12 11 10 48 6. Market Demand 10 20 50 60 The first unit of the good that Ying consumes is worth $1 to her. The 4th unit of the good Som consumes is worth $4 to her. The 5th unit of the good Fon consumes is worth less than $6 to her. When the price drops from $8 to $7, Yam's demand increases from 2 to 4 units. This reveals the 3rd and 4th unit of the good she consumes are not worth $7 each to her. Because demand st $10 is O units, no one in this market is voluntarily willing to give up $10 to buy a unit of the good. This means that noone values consumption of the good at more than $10 per unit.

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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Revealed Preference is when an individual's behavior reveals information about a person's tastes and preferences,i.e. what he likes and dislikes and how much he likes or dislikes a good.

The individual demand schedule and an individual's demand curve reveals a person's tastes and preferences for a good. Specifically it reveals how much each successive unit of the good he consumes is worth to him.

We can say this differently by saying the maximum price a person is willing to pay for a particular unit of the good is how much that unit of the good is worth to him. This value is revealed by his behavior or his willingness to voluntarily give a certain amount of money in exchange for that unit of the good. In other words, how many units of a good a person demands/buys at any given price. Look at the image. 

Market Demand Curve 12 Quantty Demanded Fon Markat Demand Gob Price 10 Ying Som Nam Yam 10 2 2. 4. 4. 21 26 5 5 29 36 3 10 2 10 10 40 12 11 10 48 Market Demand 10 20 30 40 50 60 O The first unit of the good that Ying consumes is worth $1 to her. The 4th unit of the good Som consumes is worth $4 to her. The 5th unit of the good Fon consumes is worth less than $6 to her. When the price drops from $8 to $7, Yam's demand increases from 2 to 4 units. This reveals the 3rd and 4th unit of the good she consumes are not worth $7 each to her. Because demand st $10 is O units, no one in this market is voluntarily willing to give up $10 to buy a unit of the good. This means that noone values consumption of the good at more than $10 per unit.
Transcribed Image Text:Market Demand Curve 12 Quantty Demanded Fon Markat Demand Gob Price 10 Ying Som Nam Yam 10 2 2. 4. 4. 21 26 5 5 29 36 3 10 2 10 10 40 12 11 10 48 Market Demand 10 20 30 40 50 60 O The first unit of the good that Ying consumes is worth $1 to her. The 4th unit of the good Som consumes is worth $4 to her. The 5th unit of the good Fon consumes is worth less than $6 to her. When the price drops from $8 to $7, Yam's demand increases from 2 to 4 units. This reveals the 3rd and 4th unit of the good she consumes are not worth $7 each to her. Because demand st $10 is O units, no one in this market is voluntarily willing to give up $10 to buy a unit of the good. This means that noone values consumption of the good at more than $10 per unit.
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