Mike does not sweat the petty stuff. In fact, he just cannot detect small differences. He...

 

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Mike does not sweat the petty stuff. In fact, he just cannot detect small differences. He consumes two goods, z and y. He prefers the bundle (x, y) to the bundle (z', y') if and only if ry-r'y' > 1. Otherwise, he is indifferent between the two bundles. (a) Is the relation of indifference transitive for Mike? Explain. (5 Marks) (b) Is the preferred relation transitive for Mike? Explain. (5 Marks) Mike does not sweat the petty stuff. In fact, he just cannot detect small differences. He consumes two goods, z and y. He prefers the bundle (x, y) to the bundle (z', y') if and only if ry-r'y' > 1. Otherwise, he is indifferent between the two bundles. (a) Is the relation of indifference transitive for Mike? Explain. (5 Marks) (b) Is the preferred relation transitive for Mike? Explain. (5 Marks)

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2 A No the relation of indifference is not transitive for Mike Explanation To see why the relatio... View the full answer