What are the two assumptions economists make about consumer preferences? Economi

Question

What are the two assumptions economists make about consumer preferences? Economists assume that A. consumers can rank different consumption bundles and that consumers are not limited in the amounts of goods and services they can consume. B. satisfaction is measurable in utils and that consumers can rank different consumption bundles. C. consumer preferences are transitive and that no two consumntion bundles give any one consumer the same level of utility. D. utility is meaurable in utils and that consumer preferences are transitive. E. consumers can rank diffrent consumption bundles and that consumer preferences are transitive.

Explanation / Answer

The two assumptions economists make about consumer preferences is

Option c:- consumer preferences are transitive and no two consumption bundles give any one consumer the same level of utility.

Reason:- Consumer behavior is always transitive since they may choose A over B, B over C and C over A and when a consumer consumes the first bundle of goods the utility level is the highest which goes on decreasing with every extra bundle of goods.

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