Mabel likes pancakes more than the boy band Sev’ral Timez, the boy band Sev’ral Timez more than hand puppets, and hand puppets more than pancakes. Which assumption about consumer preferences does this violate?
completeness and rankability
more is better
The more a consumer has of a particular good, the less she is willing to give up of something else to get even more of that good.
Ans) Completeness assumption tells that a person has clear preference between the two goods. For eg- a person can clearly tell that he likes oranges more or cherries.
Non satiation or more is better says that person always loves to have more.
Trastivity is same as we study in mathematics i.e if A>B, B >C then A>C.
Here, Pancakes>Timez, Timez>Hand puppet. Therefore, Pancakes>Handpuppet.
So, Transitivity is violated here.
2) If a person has more of one good, he is less willing to sacrife another good in exchange for that good. For eg- if you have 20 pants and 10 tshirts then you will less likely to give up tshirts in order to get more pants.
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