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

The monetary system.., bank A has a leverage ratio of 10 while bank B has a... bank A has a leverage ratio of 10 while bank B has a leverage ratio of 20 similar losses on bank loans at the two banks cause the value of their assets to fall by 7 percent. Which

Find out fixed cost and average cost, Sara runs a small business assembling... Sara runs a small business assembling personal computers. This table shows her total cost at different levels of output. Number of computers produced

Aggregate demand and say''s law, Aggregate demand and Say's Law  ... Aggregate demand and Say's Law  Y D = Y S in the classical model (Say's law) Aggregate demand Y D is defined as quantity of nationally produced

Illustrate the definition of money, Definition of Money We should defi... Definition of Money We should define what we mean by money. Money has a long as well as interesting history and an understanding of how we came to use money is useful for any

Price elasticity be somewhat overestimated, Movie attendance dropped 8 perc... Movie attendance dropped 8 percent as ticket prices rose a little more than 5 percent. What is price elasticity of demand for movie tickets? Could price elasticity be somewhat over

Haberler''s theory of opportunity cost, discuss Haberler''s opportunity c... discuss Haberler''s opportunity cost doctrine.

Classical model, using a graph of the classical labour market, illustrate t... using a graph of the classical labour market, illustrate the effects of a real wage existing in the market that is lower than the equilibruim real wage.what will eventually happen

National income of india, project with introduction,aims and objectives,nee... project with introduction,aims and objectives,need and importance,preparation of data and information,case study,problems,conclusion

Explain is curve with inflation, Q. Explain IS curve with inflation? T... Q. Explain IS curve with inflation? The IS curve with inflation  We can draw IS curve for a given value of π e . As earlier explained, IS curve isn't affected by changes

Difference between project proposal and project feasibility , Project feasi... Project feasibility study is needed to make a decision whether the project proposal is technically and economically possible. After finalization of the project feasibility report b