Question

Miguel consumes only art classes and anthropology classes. Miguel prefers a bundle of art classes and anthropology classes (with not necessarily equal to ) over a bundle of art classes and anthropology classes if (and only if) and . If and then Miguel prefers , over , . If neither case is true, he is indifferent between the two bundles.

a. Miguel's preferences satisfy the completeness assumption
b. Miguel's preferences satisfy the transitivity assumption
c. Miguel's preferences satisfy the non-satiation assumption

Answer 1

Answer: A. Miguel's preferences satisfy the completeness assumption

Explanation:

Based on the information given, Miguel's preferences satisfy the completeness assumption.

According to the completeness axiom, an individual or firm must be able to make a choice whether the economic agent is either indifferent to, or maybe prefers, a particular set of options over other options.

This implies that consumers can rank the possibilities as better, good, bad, worse etc and an indifference curve can be assigned.