Axiom of completeness:

Consumer's choice is complete. Implication: Since consumer is rational, she must have a unique preference relation. That means the consumer choice is either x₁Rx₂ or x₂Rx₁. Alternatively, consumer's choice is consistent or comparable. For unique preference relation, consumer choice must be transitive, where transitivity implies that if x₁Rx₂ and x₂Rx₃ then x₁Rx₃, where x₃ is another commodity. 

Axiom of continuity: Consumer's preference relation (R) is continuous.

Axiom of non-satiation: Consumer's choice is non-satiated in all goods. Implication: Non-satiation means larger the consumption of a good leads to larger satisfaction or utility or lower the consumption lower is the satisfaction or utility. Non-satiation of all goods (which means "goods are good" or "more is better") means any commodity bundle 'A' is preferred over another commodity bundle 'B' only if bundle 'A' consists larger quantity of at least one good and no less quantity of any other goods. Notationaly if A>B, then A is preferred over B or APB where B is any other commodity bundle. 

Axiom of convexity: Consumer choice is such that indifference curve is strictly convex to the origin (i.e., utility function is quassi-concave). 

Axiom of selfishness: Consumer choice is selfish. 

Implication: Consumer's choice is self-guided. It is not influenced by any other consumer.  

Posted Date: 10/26/2012 2:36:12 AM | Location : United States

Ask an Expert

Related Discussions:- Axiom of completeness - ordinal theory, Assignment Help, Ask Question on Axiom of completeness - ordinal theory, Get Answer, Expert's Help, Axiom of completeness - ordinal theory Discussions

Write discussion on Axiom of completeness - ordinal theory
Your posts are moderated

Write your message here..

Related Questions

Ppcs, how to get full marks in a drawing of ppc diagrams how to get full marks in a drawing of ppc diagrams

Steps to real wage rates to fall, Steps to real wage rates to fall Wage... Steps to real wage rates to fall Wage 'stickiness' or wage inflexibility may stop the real wage rate falling to the full-employment wage rate. Stickiness or inflexibility is ca

National income statistics, briefly explain any five uses of national incom... briefly explain any five uses of national income statistics

Economic system: protectionism and free trade, why is international trade i... why is international trade important for South Africa?

Define economics, What is the study of economics about? What is the study of economics about?

Describe endogenous growth theory, Q. Describe Endogenous growth theory? ... Q. Describe Endogenous growth theory? Endogenous growth theory or new growth theory was developed in the 1980s by Paul Romer and others. In neo-classical model, technological p

Explain the says law, Q. Explain the Says Law? GDP, and Say's Law ... Q. Explain the Says Law? GDP, and Say's Law Aggregate supply Y S = f(L, K) in the classical model where L is concluded in the labor market while K is

Number of unemployed remained the same, In a particular month, the labor fo... In a particular month, the labor force is 130 million, there are 9.1 million unemployed workers, the job -losing rate is 3% per month, and the job-finding rate is 40% per month. Ho

Effect on unemployment, From the lower left graph of Fig. it can be seen th... From the lower left graph of Fig. it can be seen that there is a time lag associated with an oil price shock and its subsequent effect on unemployment. The results show that for th

Protectionism and free trade, why is international trade important for sout... why is international trade important for south Africa