Mary has faced the following budgets and made the following choices. Budget 1: Income = 10,...
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Mary has faced the following budgets and made the following choices. Budget 1: Income = 10, price of x is 2 and price of y is 1. Choice is x=3 and y = 4. Budget 2: Income = 8, price of x and y are both 1. Choice is x = 1 and y=7. (a) Do her choices satisfy the Weak Axiom of Revealed Preference (WARP)? Explain. (b) Do her choices satisfy the Strong Axiom of Revealed Preference (SARP)? Explain. Mary has faced the following budgets and made the following choices. Budget 1: Income = 10, price of x is 2 and price of y is 1. Choice is x=3 and y = 4. Budget 2: Income = 8, price of x and y are both 1. Choice is x = 1 and y=7. (a) Do her choices satisfy the Weak Axiom of Revealed Preference (WARP)? Explain. (b) Do her choices satisfy the Strong Axiom of Revealed Preference (SARP)? Explain.
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a To check if Marys choices satisfy the Weak Axiom of Revealed Preference WARP we need to s... View the full answer
Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
Posted Date:
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