We know that Jack considers both coke and hotdogs to be goods. We know that he i

Question

We know that Jack considers both coke and hotdogs to be goods. We know that he is indifferent between consuming 4 hotdogs and 6 cokes and consuming 2 hotdogs and 14 cokes. What principle of preferences prohibits us from expecting Jack to also be indifferent to consuming 3 hotdogs and 18 cokes?

a. Completeness and Rankability

b. For most goods, more is better than less (or atleast more is no worse than less)

c. Transitivity

d. 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

Explanation / Answer

Jack is in different between 4 hot dogs and 6 coke as well as 2 hot dogs and 14 cokes. To have more number of cokes Jack is willing to give up few units of hotdogs. Note that 3rd hot dog lies between 2 and 4. Which means if he moves from 4 hot dogs to 3, he cannot have more than 14 cokes. This implies that he is less willing to give up hot dogs for more number of cokes.

Therefore the correct option is option d.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.