Significance of basic assumptions about individual preference.

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Answer 1

Question

Chapter 3, Problem 1RQ

To determine

Significance of basic assumptions about individual preference.

Expert Solution & Answer

Explanation of Solution

There are four main assumptions about individual preference. They are as follows:

(1) Preferences are complete: This assumption explains that the consumers are able to compare and rank the goods and services.
(2) Preferences are transitive: The second assumption explains that the preferences of consumers are transitive or constant. In other words, if a consumer prefers apple over orange and orange over banana, then he would prefer apple over banana.
(3) More is preferred to less: The third assumption explains that the consumers prefer to have all the goods in more quantity.
(4) Diminishing marginal rate of substitution: The forth assumption explains that the consumer can give up fewer amount of commodity in order to obtain more of other goods.

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Answer 2

Question

Chapter 3, Problem 1RQ

To determine

Significance of basic assumptions about individual preference.

Expert Solution & Answer

Explanation of Solution

There are four main assumptions about individual preference. They are as follows:

(1) Preferences are complete: This assumption explains that the consumers are able to compare and rank the goods and services.
(2) Preferences are transitive: The second assumption explains that the preferences of consumers are transitive or constant. In other words, if a consumer prefers apple over orange and orange over banana, then he would prefer apple over banana.
(3) More is preferred to less: The third assumption explains that the consumers prefer to have all the goods in more quantity.
(4) Diminishing marginal rate of substitution: The forth assumption explains that the consumer can give up fewer amount of commodity in order to obtain more of other goods.

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Answer 3

Question

Chapter 3, Problem 1RQ

To determine

Significance of basic assumptions about individual preference.

Expert Solution & Answer

Explanation of Solution

There are four main assumptions about individual preference. They are as follows:

(1) Preferences are complete: This assumption explains that the consumers are able to compare and rank the goods and services.
(2) Preferences are transitive: The second assumption explains that the preferences of consumers are transitive or constant. In other words, if a consumer prefers apple over orange and orange over banana, then he would prefer apple over banana.
(3) More is preferred to less: The third assumption explains that the consumers prefer to have all the goods in more quantity.
(4) Diminishing marginal rate of substitution: The forth assumption explains that the consumer can give up fewer amount of commodity in order to obtain more of other goods.

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Answer 4

Question

Chapter 3, Problem 1RQ

To determine

Significance of basic assumptions about individual preference.

Expert Solution & Answer

Explanation of Solution

There are four main assumptions about individual preference. They are as follows:

(1) Preferences are complete: This assumption explains that the consumers are able to compare and rank the goods and services.
(2) Preferences are transitive: The second assumption explains that the preferences of consumers are transitive or constant. In other words, if a consumer prefers apple over orange and orange over banana, then he would prefer apple over banana.
(3) More is preferred to less: The third assumption explains that the consumers prefer to have all the goods in more quantity.
(4) Diminishing marginal rate of substitution: The forth assumption explains that the consumer can give up fewer amount of commodity in order to obtain more of other goods.

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Answer 5

Chapter 3, Problem 1RQ

To determine

Significance of basic assumptions about individual preference.

Expert Solution & Answer

Explanation of Solution

There are four main assumptions about individual preference. They are as follows:

(1) Preferences are complete: This assumption explains that the consumers are able to compare and rank the goods and services.
(2) Preferences are transitive: The second assumption explains that the preferences of consumers are transitive or constant. In other words, if a consumer prefers apple over orange and orange over banana, then he would prefer apple over banana.
(3) More is preferred to less: The third assumption explains that the consumers prefer to have all the goods in more quantity.
(4) Diminishing marginal rate of substitution: The forth assumption explains that the consumer can give up fewer amount of commodity in order to obtain more of other goods.

Answer 6

Chapter 3, Problem 1RQ

To determine

Significance of basic assumptions about individual preference.

Expert Solution & Answer

Explanation of Solution

There are four main assumptions about individual preference. They are as follows:

(1) Preferences are complete: This assumption explains that the consumers are able to compare and rank the goods and services.
(2) Preferences are transitive: The second assumption explains that the preferences of consumers are transitive or constant. In other words, if a consumer prefers apple over orange and orange over banana, then he would prefer apple over banana.
(3) More is preferred to less: The third assumption explains that the consumers prefer to have all the goods in more quantity.
(4) Diminishing marginal rate of substitution: The forth assumption explains that the consumer can give up fewer amount of commodity in order to obtain more of other goods.

Answer 7

Chapter 3, Problem 1RQ

To determine

Significance of basic assumptions about individual preference.

Answer 8

Expert Solution & Answer

Explanation of Solution

There are four main assumptions about individual preference. They are as follows:

(1) Preferences are complete: This assumption explains that the consumers are able to compare and rank the goods and services.
(2) Preferences are transitive: The second assumption explains that the preferences of consumers are transitive or constant. In other words, if a consumer prefers apple over orange and orange over banana, then he would prefer apple over banana.
(3) More is preferred to less: The third assumption explains that the consumers prefer to have all the goods in more quantity.
(4) Diminishing marginal rate of substitution: The forth assumption explains that the consumer can give up fewer amount of commodity in order to obtain more of other goods.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 3 - Prob. 1RQ Ch. 3 - Prob. 2RQ Ch. 3 - Prob. 3RQ Ch. 3 - Prob. 4RQ Ch. 3 - Prob. 5RQ Ch. 3 - Prob. 6RQ Ch. 3 - Prob. 7RQ Ch. 3 - Prob. 8RQ Ch. 3 - Prob. 9RQ Ch. 3 - Prob. 10RQ

Significance of basic assumptions about individual preference.

Significance of basic assumptions about individual preference.

Explanation of Solution

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