Author Question: Each of the following consumers exhibit behavior that violates one of the basic assumptions of ... (Read 124 times)

itsmyluck · **on:** Jul 1, 2018

Each of the following consumers exhibit behavior that violates one of the basic assumptions of consumer preferences. Identify the assumption that is violated for each individual.

Art says that he can watch 2 movies a week but couldn't be paid to watch another movie after that.
Alex says that he prefers going to a movie over hiking. He also indicates that he prefers hiking to swimming. Alex then states that he would rather go swimming than go to a movie.
Alicia says that she prefers hiking to watching a movie but can't determine her preferences for swimming.

Question 2

Fixed costs are fixed with respect to changes in

A) output.
B) capital expenditure.
C) wages.
D) time.

s.meritte · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

Art violates the assumption that consumers desire more of a good to less. Alex's preferences violate transitivity. Alicia violates the completeness assumption.

Answer to Question 2

A