When we do not have information regarding a consumer's indifference map, which of the following analyses can provide additional information regarding the consumer's choices?
A)Revealed preference analysis.
B)Indifference curve analysis.
C)Market basket analysis.
D)Optimization analysis.

Question

Quizplus · Accepted Answer

Revealed preference analysis can provide information regarding the consumer's choices by examining their actual behavior in the market. This analysis looks at the goods that the consumer actually purchases and the prices they pay for them to determine their preferred bundle of goods. This can provide insight into the consumer's preferences and the relative value they place on different goods even when we do not have information about their indifference map. Revealed preference analysis involves observing the choices made by the consumer in the market and inferring their indifference map from those choices. This analysis can provide additional information regarding the consumer's choices even without having access to their indifference map. Indifference curve analysis, market basket analysis, and optimization analysis all require knowledge of the indifference map and are not helpful in this scenario.

When We Do Not Have Information Regarding a Consumer's Indifference