Denise is shopping for lobsters and eclairs. When she faces budget line b₁, she chooses market basket A over market basket B. When she faces budget line b₂, she chooses basket B over basket C. Which assumption of consumer theory helps us determine Denise's preference ordering over basket A and basket C? A) Completeness B) More is better than less C) Transitivity D) Convexity

Question

Quizplus · Accepted Answer

Transitivity helps us determine Denise's preference ordering over basket A and basket C because it implies that if Denise prefers A over B and B over C, then she must prefer A over C.

Denise Is Shopping for Lobsters and Eclairs