Figure 3A

-This consumer's utility maximizing consumption bundle is illustrated in Figure 3A. Which assumption about consumer preferences guarantees it is not point B?
A)continuity
B)transitivity
C)nonsatiation
D)completeness

Question

Figure 3A

-This consumer's utility maximizing consumption bundle is illustrated in Figure 3A. Which assumption about consumer preferences guarantees it is not point B?
A)continuity 
B)transitivity 
C)nonsatiation 
D)completeness

Quizplus · Accepted Answer

The only assumption that guarantees that the consumer's utility-maximizing consumption bundle is not point B is nonsatiation. If point B were on the indifference curve passing through the bundle, the consumer would prefer any consumption bundle on a higher indifference curve to B, which violates the assumption of nonsatiation. Continuity, transitivity, and completeness are also assumptions about consumer preferences but do not specifically address the issue of point B.

Figure 3A -This Consumer's Utility Maximizing Consumption Bundle Is Illustrated in Figure