For each of the following preference relations in the consumption of two goods (1 and 2):...

   

Transcribed Image Text:

For each of the following preference relations in the consumption of two goods (1 and 2): describe the upper contour set, the lower contour set, the indifference set of bundle (2,1), and interpret them. Then check whether these preference relations are rational (by separately examining whether they are complete and transitive), monotone, and convex. (a) Bundle (₁, 2) is weakly preferred to (y₁, y2), i.e., (x₁, x2) (y₁, y2) if and only if x₁y₁ - 1. (b) Bundle (1, 2) is weakly preferred to (y₁, y2), i.e., (x₁, x2) (y₁, y2), if x₁ ≥ ₁-1 and x2 < y2 + 1. For each of the following preference relations in the consumption of two goods (1 and 2): describe the upper contour set, the lower contour set, the indifference set of bundle (2,1), and interpret them. Then check whether these preference relations are rational (by separately examining whether they are complete and transitive), monotone, and convex. (a) Bundle (₁, 2) is weakly preferred to (y₁, y2), i.e., (x₁, x2) (y₁, y2) if and only if x₁y₁ - 1. (b) Bundle (1, 2) is weakly preferred to (y₁, y2), i.e., (x₁, x2) (y₁, y2), if x₁ ≥ ₁-1 and x2 < y2 + 1.

Answer rating: 100% (QA)

For each of the following preference relations in the consumption of two goods 1 and 2 we can describe the following sets Upper Contour Set The upper ... View the full answer