★ Must-know
📌 Completeness requires a consumer to rank any two bundles as a ≻ b, b ≻ a, or a ∽ b.
📌 Transitivity requires that if a ≻ b and b ≻ c, then a ≻ c.
Further detail
📌 Strict preference is written a ≻ b, weak preference a ≿ b, and indifference a ∽ b.
📌 The more-is-better assumption says that, all else equal, more of a good is preferred to less, unlike the case of a bad.
1. What do consumer preferences represent when a person compares bundles of goods?
2. A consumer is asked to compare bundles X and Y. Which response pattern satisfies completeness?
3. A consumer strictly prefers bundle A to B and bundle B to C. What ranking follows from transitivity?
What do consumer preferences rank according to satisfaction from consumption?
Bundles of goods.
What does completeness require when comparing any two bundles?
The consumer ranks them as , , or .
What does transitivity imply when and ?
What does an indifference curve represent to a consumer?
Bundles considered equally desirable that provide the same utility.
What shape restrictions apply to indifference curves?
They cannot cross or be thick.
How do indifference curves slope under the stated assumptions?
Downward.
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