Which of the following cases violates the property of transitivity? A ~ B, B ~ C

Question

Which of the following cases violates the property of transitivity? A ~ B, B ~ C, A ~ C. A > B, B > C, C > A. None of the statements violates the transitivity property. A > B, B > C, A > C. A cash gift causes the budget line to: rotate clockwise. None of the statements is correct. shift to the right in a parallel fashion. shift to the left in a parallel fashion. Which of the following does not affect the shape of a consumer's indifference curves? prices age advertising tastes education Jane spends $210 per month on wine and beer. Her utility function is given by TU = 100WB, where W represents the number of bottles of wine that she buys and B represents the number of cases of beer that she buys. If wine costs $10 per bottle and beer costs $15 per case, she will maximize utility by buying: 10.5 bottles of wine and 7 cases of beer 2 bottles of wine and 3 cases of beer equal amounts of wine and beer 10 bottles of wine and 13.33 cases of beer none of the above

Explanation / Answer

Answer.)

Q3.) C. A B, B C, C A. ( if A> B, B> C then by transitivity property A>C)

Q4.) c. Shift to the right in a parallel fashion. ( cash grants increases the income of the consumer and hence it shifts to the right.)

Q5.) C.Advertising.

Q.6) a.10.5 bottles of wine and 7 cases of beer.

1. Setting up Lagrangian Function

U = f (B, W, )

TU = 100WB

S.T 210 = 15B + 10W

210 – 15B – 10W = 0

Lagrainge Function:

U = 100WB + (210 – 15B – 10W)

2. Determining first order conditions:

dU / dW = 100B – 10 so 100B = 10 or = 10B

dU / d B = 100W – 15 so 100W =15 or = 20/3W

dU / d = 210 – 15B – 10W

By solving simultaneously we get optimal combination of wine and beer she will consume to maximize her utility Wine= 10.5 units Beer = 7 units

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