Author Question: According to Revealed Preferences, if a Consumer chooses a more expensive bundle of goods over a ... (Read 64 times)

magmichele12 · **on:** Jul 1, 2018

According to Revealed Preferences, if a Consumer chooses a more expensive bundle of goods over a cheaper bundle of goods, we can conclude

A) the consumer prefers the more expensive bundle of goods.
B) the consumer is behaving irrationally.
C) the consumer is unaware of the cheaper bundle of goods.
D) the consumer has convex preferences.

Question 2

If Ann's utility function is U = W0.5, and she invests in a business which can yield 6,400 with probability 1/5, and 3600 with probability 4/5, then her expected wealth is

A) 1280.
B) 2880.
C) 4160.
D) 5840.