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Questions › DSE › DSE 2018 › Q36
4 marks, −1Microeconomics › Consumer preferences and utility › Preference axioms and rationalityHardabout 3 min

DSE 2018 Question 36: Consumer preferences and utility

A consumer weakly prefers a basket (a1,a2,a3)(a_1, a_2, a_3)(a1​,a2​,a3​) to a basket (b1,b2,b3)(b_1, b_2, b_3)(b1​,b2​,b3​) if a1≥b1a_1 \geq b_1a1​≥b1​, a1+a2≥b1+b2a_1 + a_2 \geq b_1 + b_2a1​+a2​≥b1​+b2​, and a1+a2+a3≥b1+b2+b3a_1 + a_2 + a_3 \geq b_1 + b_2 + b_3a1​+a2​+a3​≥b1​+b2​+b3​. Which of the following statements about this preference is false?

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Plain-text version

A consumer weakly prefers a basket (a₁, a₂, a₃) to a basket (b₁, b₂, b₃) if a₁ ≥ b₁, a₁ + a₂ ≥ b₁ + b₂, and a₁ + a₂ + a₃ ≥ b₁ + b₂ + b₃. Which of the following statements about this preference is false? (A) It is transitive (B) It is monotonic (C) It is continuous (D) It is complete

Also written as: A consumer weakly prefers a basket (a_1, a_2, a_3) to a basket (b_1, b_2, b_3) if a_1 >= b_1, a_1 + a_2 >= b_1 + b_2, and a_1 + a_2 + a_3 >= b_1 + b_2 + b_3. Which of the following statements about this preference is false?

Consumer preferences and utility has come up 93 times in 7 exams since 2007.

What this question tests

This question is on Preference axioms and rationality, part of Consumer preferences and utility in Microeconomics.

The assumptions that make preferences well behaved: completeness, transitivity, monotonicity, continuity and convexity.

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