Use the following two statements to answer this question:
I. According to the three basic assumptions regarding people's preferences, a person will always prefer to earn a living through honest work rather than a life of crime.
II. When we say that preferences are complete, we mean that if a consumer prefers market basket A to market basket B, and prefers market basket B to market basket C, then the consumer prefers market basket A to market basket C.
A) Both I and II are true.
B) I is true and II is false.
C) I is false and II is true.
D) Both I and II are false.

Question

Quizplus · Accepted Answer

Statement I is false because the basic assumptions about preferences do not inherently include moral judgments about honesty versus crime. Statement II is false because it incorrectly describes the concept of transitivity, not completeness. Completeness means a consumer can compare any two baskets and have a preference or be indifferent, not necessarily transitive preferences.

Use the Following Two Statements to Answer This Question