Carina consumes two goods, X and Y, both of which she likes. In month 1 she chooses basket A given budget line BL1. In month 2 she chooses B given budget line BL2, and in month 3 she chooses C given budget lineBL3. Assume her indifference map is unchanged over the three months. Use the theory of revealed preference to show whether her choices are consistent with utility maximizing behavior. If so, show how she ranks the three baskets. If it is not possible to infer how she ranks the baskets, explain why not.

Transcribed Image Text:

BL1 BL2