Suppose an economic agent lexicographically prefers to . Then her indifference curves are
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1 mark, −0.333333333333333MicroeconomicsConsumer preferences and utilityPerfect substitutes, complements and lexicographic preferencesModerateabout 3 min
DSE 2015 Question 5: Consumer preferences and utility
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Suppose an economic agent lexicographically prefers x to y. Then her indifference curves are (A) straight lines parallel to the x axis (B) straight lines parallel to the y axis (C) convex sets (D) L shaped curves
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What this question tests
This question is on Perfect substitutes, complements and lexicographic preferences, part of Consumer preferences and utility in Microeconomics.
Preferences that give straight-line, L-shaped or dictionary-ordered indifference sets, and how they differ from standard ones.
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