A consumer typically buys toothpaste A. He is watching TV one day and sees an advertisement about toothpaste B. He realized that toothpaste B has been available for purchase as long as toothpaste A, but he never knew it existed. What assumption is violated?
A) Transitive Preferences.
B) Increasing utility for normal goods.
C) Complete Preferences.
D) Stable Preferences.

Question

Quizplus · Accepted Answer

The assumption violated is Complete Preferences, which means the consumer is aware of all available options. In this case, the consumer was not aware of toothpaste B, indicating incomplete preferences.

A Consumer Typically Buys Toothpaste A