Suppose that when Jane is presented with the following two menus, her choices from them are as below 2 • When presented with the menu {6 units of apples, 5 units of bananas}, Jane chooses 6 units of apples. • When presented with the menu {7 units of oranges, 5 units of bananas}, Jane chooses 5 units of bananas. Suppose that Jane is then presented with the menu {7 units of oranges, 6 units of apples} What must Jane's choice be from this menu so that her behavior conforms to the axioms of rational choice? Explain. Suppose that Frederick choices from the following menus are as follows • For any e > 0³, out of the menu {(4 + ɛ apples and 3 bananas), (5 oranges and 3 bananas)}, Frederick chooses (4+ & apples and 3 bananas). • Out of the menu {(4 apples and 3 bananas), (5 oranges and 3 bananas)}, Fred- erick chooses (5 oranges and 3 bananas) What axiom of rational choice does Frederick's behavior evidently violate? Discuss.

Suppose that when Jane is presented with the following two menus, her choices from them are as below 2 • When presented with the menu {6 units of apples, 5 units of bananas}, Jane chooses 6 units of apples. • When presented with the menu {7 units of oranges, 5 units of bananas}, Jane chooses 5 units of bananas. Suppose that Jane is then presented with the menu {7 units of oranges, 6 units of apples} What must Jane's choice be from this menu so that her behavior conforms to the axioms of rational choice? Explain. Suppose that Frederick choices from the following menus are as follows • For any e > 0³, out of the menu {(4 + ɛ apples and 3 bananas), (5 oranges and 3 bananas)}, Frederick chooses (4+ & apples and 3 bananas). • Out of the menu {(4 apples and 3 bananas), (5 oranges and 3 bananas)}, Fred- erick chooses (5 oranges and 3 bananas) What axiom of rational choice does Frederick's behavior evidently violate? Discuss.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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