Consider the following situations. In the table, (px, Py, M) describes the prices andincome and (x, y) describes the chosen bundle under those prices and income.Situation Prices and Income123(2,4,10)(1,8,5)(4,2,6)Chosen bundleA = (1,2)B = (1,0.5)C = (1,1)Which bundles amongst the 3 chosen ones is A directly revealed preferred to?Which bundles amongst the 3 chosen ones is B directly revealed preferred to?Which bundles amongst the 3 chosen ones is C directly revealed preferred to?Do these choices satisfy the weak axiom of revealed preference?The solution of questions (a) (b) (c) are given as follows,please just solvefor question (d)!! (Thanks very much)Part AConsumer purchased bundle A (1,2) with the budget of (2,4,10) => Total spending = 1*2 +2*4=10Lets check whether with the same budget, bundle B & C are affordable or notBundle B (1,0.5) => Total spending = 1*2 +0.5*4=2+2=4Bundle C (1,1) => Total spending = 2*1 +4*1=2+4= 6Hence when consumer purchased the bundle A then within the same budget bundle B & C wereaffordable => A is directly revealed preferred to B & CPart BConsumer purchased bundle B (1,0.5) with the budget of (1,8,5) => Total spending=1*1 +8*0.5=5Lets check whether with the same budget, bundle A & C are affordable or notBundle A (1,2)=> Total spending = 1*1 +8*2= 1+16=17Bundle C (1,1) => Total spending = 1*1 +8*1=1+8=9Hence when consumer purchased the bundle B then within the same budget bundle A & C wereunaffordable => B is not directly revealed preferred to A & CPart CConsumer purchased bundle C (1,1) with the budget of (4,2,6)=> Total spending=4*1 +2*1=6Lets check whether with the same budget, bundle A & C are affordable or notBundle A (1,2)=> Total spending=4*1 +2*2=4+4=8Bundle B (1,0.5) => Total spending = 4*1 + 2*0.5=4+1=5Hence when consumer purchased the bundle C then within the same budget bundle A wasunaffordable whereas B was affordable => C is revealed preferred to B

The axiom that depicts that individuals choose what they prefer and the preferences are always…

Consider the following situations. In the table, (px. Py, M) describes the prices and income and (x, y) describes the chosen bundle under those prices and income. Situation Prices and Income Chosen bundle A = (1,2) B=(1,0.5) C = (1,1) 1 2 3 (2,4,10) (1,8,5) (4,2,6) Which bundles amongst the 3 chosen ones is A directly revealed preferred to? Which bundles amongst the 3 chosen ones is B directly revealed preferred to? Which bundles amongst the 3 chosen ones is C directly revealed preferred to? Do these choices satisfy the weak axiom of revealed preference? The solution of questions (a) (b) (c) are given as follows,please just solve for question (d)!! (Thanks very much)

Consider the following situations. In the table, (px. Py, M) describes the prices and income and (x, y) describes the chosen bundle under those prices and income. Situation Prices and Income Chosen bundle A = (1,2) B=(1,0.5) C = (1,1) 1 2 3 (2,4,10) (1,8,5) (4,2,6) Which bundles amongst the 3 chosen ones is A directly revealed preferred to? Which bundles amongst the 3 chosen ones is B directly revealed preferred to? Which bundles amongst the 3 chosen ones is C directly revealed preferred to? Do these choices satisfy the weak axiom of revealed preference? The solution of questions (a) (b) (c) are given as follows,please just solve for question (d)!! (Thanks very much)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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