Question: You are given the following partial information about a consumer's purchases. He consumes only two goods. Year 1 Year 2 Quantity Price Quantity Price Good

You are given the following partial information about a consumer's purchases. He consumes only two goods. Year 1 Year 2 Quantity Price Quantity Price Good 1 100 100 120 100 Good 2 100 100 x 80 Over what range (x) of quantities of good 2 consumed in year 2 would you conclude: 1. That this behavoiour is inconsistent (i.e.: in contradiction with WARP) 2. That the consumer's choice behaviour reveals that he prefers the consumption bundle in year 1 to that in year 2? (Assume that the weak axiom is satised.)
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
