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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.
if the price elasticity of demand is computed for two products, and product A measures .79 , and product B measures 1.6 , then ? a. product A is more price elastic than product
To develop what you believe is a terrific idea for a video game, you lease 50,000 square feet in an office building from Commercial Property, LLC, under a written five-year lease.
Discretionary fiscal policy will stabilize the economy most when: A.) deficits are incurred during recessions and surpluses during inflations B.) the budget is balanced each year C
x=40-0.2p where x=x1+x2 c1=50+2x1+0.5x1 c2=100+10x2
Minimum wage laws are common in many countries. The debate over minimum wage includes claims about the impact of this action on employment levels and wage levels. What impact does
Let kids denote the number of children ever born to a woman, and let educ denote years of education for the woman. A simple model relating fertility to years of education is kids =
1.the AD curve represents at the same time the demand for goods, money and labor in the economy 2.in the AS-AD model, higher competition among producers leads to a medium run equil
Using an aggregate demand and supply diagram, explain how each of the following scenarios affects the equilibrium price level and aggregate output a/Consumers expect a recession b/
what is credit multiplier?
Because the structure of the personal income tax is progressive, a larger share of income is taxed at higher rates as real income increases. Therefore, economic growth automaticall
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