In the utility maximizing model, consumer preferences are assumed to be transitive.What does this mean?
A)that consumers prefer more of a good to less
B)that consumers have the freedom to change their preferences from time to time
C)that consumers have preferences that are relatively consistent in the time period under consideration
D)that consumers go through cycles in their consumption behavior

Question

Quizplus · Accepted Answer

Transitivity means that if a consumer prefers A to B and B to C, then they must also prefer A to C. This implies that the consumer's preferences are consistent and logical.

In the Utility Maximizing Model, Consumer Preferences Are Assumed to Be