The assumptions about consumer preference.

Question

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Answer 1

Question

Chapter 4, Problem 1RQ

To determine

The assumptions about consumer preference.

Expert Solution & Answer

Explanation of Solution

There are mainly four assumptions or properties which help the consumers to determine their preferences about all the possible combinations of goods and services that they can buy.

The ‘completeness and rankability’ is one of the assumptions that help the consumer to determine the preference. This assumption states that the consumers can make the comparisons across all sets of goods that they consider. In economics, any collection of these goods is called as consumption bundle.

Another assumption is that, for most goods, more is better than less which means in general, more of a good thing is good.

The ‘transitivity is the other assumption of consumer preferences where for any three bundles of goods, A, B, and C, if a consumer prefer A to B and prefer B to C. Then, the consumer has to prefer A to C. Hence, the assumption ‘transitivity’ is a logical consistency on the preferences.

The fourth assumption for the consumer preference is that, the more a consumer has of a particular good, the less she is willing to give up on something else to get even more of that good. The concept of variety is the idea behind this assumption.

Economics Concept Introduction

Consumption bundle: The consumption bundle is a set of goods and services a consumer considers purchasing.

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Answer 2

Question

Chapter 4, Problem 1RQ

To determine

The assumptions about consumer preference.

Expert Solution & Answer

Explanation of Solution

There are mainly four assumptions or properties which help the consumers to determine their preferences about all the possible combinations of goods and services that they can buy.

The ‘completeness and rankability’ is one of the assumptions that help the consumer to determine the preference. This assumption states that the consumers can make the comparisons across all sets of goods that they consider. In economics, any collection of these goods is called as consumption bundle.

Another assumption is that, for most goods, more is better than less which means in general, more of a good thing is good.

The ‘transitivity is the other assumption of consumer preferences where for any three bundles of goods, A, B, and C, if a consumer prefer A to B and prefer B to C. Then, the consumer has to prefer A to C. Hence, the assumption ‘transitivity’ is a logical consistency on the preferences.

The fourth assumption for the consumer preference is that, the more a consumer has of a particular good, the less she is willing to give up on something else to get even more of that good. The concept of variety is the idea behind this assumption.

Economics Concept Introduction

Consumption bundle: The consumption bundle is a set of goods and services a consumer considers purchasing.

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Answer 3

Question

Chapter 4, Problem 1RQ

To determine

The assumptions about consumer preference.

Expert Solution & Answer

Explanation of Solution

There are mainly four assumptions or properties which help the consumers to determine their preferences about all the possible combinations of goods and services that they can buy.

The ‘completeness and rankability’ is one of the assumptions that help the consumer to determine the preference. This assumption states that the consumers can make the comparisons across all sets of goods that they consider. In economics, any collection of these goods is called as consumption bundle.

Another assumption is that, for most goods, more is better than less which means in general, more of a good thing is good.

The ‘transitivity is the other assumption of consumer preferences where for any three bundles of goods, A, B, and C, if a consumer prefer A to B and prefer B to C. Then, the consumer has to prefer A to C. Hence, the assumption ‘transitivity’ is a logical consistency on the preferences.

The fourth assumption for the consumer preference is that, the more a consumer has of a particular good, the less she is willing to give up on something else to get even more of that good. The concept of variety is the idea behind this assumption.

Economics Concept Introduction

Consumption bundle: The consumption bundle is a set of goods and services a consumer considers purchasing.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 4, Problem 1RQ

To determine

The assumptions about consumer preference.

Expert Solution & Answer

Explanation of Solution

There are mainly four assumptions or properties which help the consumers to determine their preferences about all the possible combinations of goods and services that they can buy.

The ‘completeness and rankability’ is one of the assumptions that help the consumer to determine the preference. This assumption states that the consumers can make the comparisons across all sets of goods that they consider. In economics, any collection of these goods is called as consumption bundle.

Another assumption is that, for most goods, more is better than less which means in general, more of a good thing is good.

The ‘transitivity is the other assumption of consumer preferences where for any three bundles of goods, A, B, and C, if a consumer prefer A to B and prefer B to C. Then, the consumer has to prefer A to C. Hence, the assumption ‘transitivity’ is a logical consistency on the preferences.

The fourth assumption for the consumer preference is that, the more a consumer has of a particular good, the less she is willing to give up on something else to get even more of that good. The concept of variety is the idea behind this assumption.

Economics Concept Introduction

Consumption bundle: The consumption bundle is a set of goods and services a consumer considers purchasing.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 4, Problem 1RQ

To determine

The assumptions about consumer preference.

Expert Solution & Answer

Explanation of Solution

There are mainly four assumptions or properties which help the consumers to determine their preferences about all the possible combinations of goods and services that they can buy.

The ‘completeness and rankability’ is one of the assumptions that help the consumer to determine the preference. This assumption states that the consumers can make the comparisons across all sets of goods that they consider. In economics, any collection of these goods is called as consumption bundle.

Another assumption is that, for most goods, more is better than less which means in general, more of a good thing is good.

The ‘transitivity is the other assumption of consumer preferences where for any three bundles of goods, A, B, and C, if a consumer prefer A to B and prefer B to C. Then, the consumer has to prefer A to C. Hence, the assumption ‘transitivity’ is a logical consistency on the preferences.

The fourth assumption for the consumer preference is that, the more a consumer has of a particular good, the less she is willing to give up on something else to get even more of that good. The concept of variety is the idea behind this assumption.

Economics Concept Introduction

Consumption bundle: The consumption bundle is a set of goods and services a consumer considers purchasing.

Answer 6

Chapter 4, Problem 1RQ

To determine

The assumptions about consumer preference.

Expert Solution & Answer

Explanation of Solution

There are mainly four assumptions or properties which help the consumers to determine their preferences about all the possible combinations of goods and services that they can buy.

The ‘completeness and rankability’ is one of the assumptions that help the consumer to determine the preference. This assumption states that the consumers can make the comparisons across all sets of goods that they consider. In economics, any collection of these goods is called as consumption bundle.

Another assumption is that, for most goods, more is better than less which means in general, more of a good thing is good.

The ‘transitivity is the other assumption of consumer preferences where for any three bundles of goods, A, B, and C, if a consumer prefer A to B and prefer B to C. Then, the consumer has to prefer A to C. Hence, the assumption ‘transitivity’ is a logical consistency on the preferences.

The fourth assumption for the consumer preference is that, the more a consumer has of a particular good, the less she is willing to give up on something else to get even more of that good. The concept of variety is the idea behind this assumption.

Economics Concept Introduction

Consumption bundle: The consumption bundle is a set of goods and services a consumer considers purchasing.

Answer 7

Chapter 4, Problem 1RQ

To determine

The assumptions about consumer preference.

Answer 8

Expert Solution & Answer

Explanation of Solution

There are mainly four assumptions or properties which help the consumers to determine their preferences about all the possible combinations of goods and services that they can buy.

The ‘completeness and rankability’ is one of the assumptions that help the consumer to determine the preference. This assumption states that the consumers can make the comparisons across all sets of goods that they consider. In economics, any collection of these goods is called as consumption bundle.

Another assumption is that, for most goods, more is better than less which means in general, more of a good thing is good.

The ‘transitivity is the other assumption of consumer preferences where for any three bundles of goods, A, B, and C, if a consumer prefer A to B and prefer B to C. Then, the consumer has to prefer A to C. Hence, the assumption ‘transitivity’ is a logical consistency on the preferences.

The fourth assumption for the consumer preference is that, the more a consumer has of a particular good, the less she is willing to give up on something else to get even more of that good. The concept of variety is the idea behind this assumption.