It is possible for a consumer to satisfy the weak axiom of revealed preference but violate the strong axiom of revealed preference.

Question

Quizplus · Accepted Answer

The weak axiom of revealed preference (WARP) states that if a consumer chooses bundle A over bundle B, and then chooses bundle B over bundle C, then they must prefer bundle A over bundle C. This axiom can be satisfied even if the consumer's preferences are not transitive.

On the other hand, the strong axiom of revealed preference (SARP) requires transitivity in addition to WARP. Specifically, it states that if a consumer's utility is higher for bundle A than for B, then they must always choose A over B, regardless of the prices of A and B.

Therefore, it is possible for a consumer to satisfy WARP but violate SARP by exhibiting non-transitive preferences, which would allow them to sometimes choose B over A when prices change, even though they initially chose A over B.

It Is Possible for a Consumer to Satisfy the Weak