Topic 3 - T2

Question 1

Continuity

Answer 1

If qa>qb and qb>qc then there must be a path joining qa to qc

Question 2

Nonsatiation

Answer 2

In any bundle there’s always some direction in which changing the bundle makes the consumer better off - there’s no utility max or bliss points

Question 3

Monotonicity

Answer 3

Larger bundles > Smaller bundles

Question 4

Weakly preferred sets are ____ & MRS is ____

Answer 4

Convex and diminishing

Question 5

Homotheticity

Answer 5

If qa ~ qb then for any λ>0, λqa ~ λqb

MRS are constant along rays through the origin

Question 6

Quasilinearity

Answer 6

If qa ~ qb then (qa + λ)~(qb + λ)

Shifts indifference curves horizontally.