Now suppose that the relevant budget constraint is I2. Would the individual choose B? Why? 3. Suppose that bundle A in the following figure is chosen by a rational individual (who respects the revealed preferences axiom) when the relevant budget constraint is Ij. (a) Is A revealed preferred to B? (b) Suppose that the relevant budget constraint is I3. Would the individual choose B? Why?
Now suppose that the relevant budget constraint is I2. Would the individual choose B? Why? 3. Suppose that bundle A in the following figure is chosen by a rational individual (who respects the revealed preferences axiom) when the relevant budget constraint is Ij. (a) Is A revealed preferred to B? (b) Suppose that the relevant budget constraint is I3. Would the individual choose B? Why?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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(c) Now suppose that the relevant budget constraint is I2. Would the individual choose B? Why?
3. Suppose that bundle A in the following figure is chosen by a rational individual (who respects the revealed preferences axiom) when the relevant budget constraint is Ij.
(a) Is A revealed preferred to B?
(b) Suppose that the relevant budget constraint is I3. Would the individual choose B? Why?
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