We know that Julio considers both wine and pizza to be goods. We know that he is

Question

We know that Julio considers both wine and pizza to be goods. We know that he is indifferent between consuming 4 slices of pizza and 6 ounces of wine and consuming 2 slices of pizza and 14 ounces of wine. What principle of preferences prohibits us from expecting Julio to also be indifferent to consuming 3 slices of pizza and 18 ounces of wine?

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

The preference of the consumer shows that as more and mire of pizza is consumed she is willing to give up less and less of wine. This is referred to as diminishing marginal rate of substitution. Thus she will not be indifferent between 3 units of pizza and 18 units of wine due to option d.

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