The assumption on utility functions that states that, if two bundles are close to each other in the feasible set, then they will be assigned utility numbers that are close to each other as well is called
A) convexity
B) continuity
C) ordinality

Question

Quizplus · Accepted Answer

The assumption described is continuity. Convexity is a different property of utility functions, referring to the shape of the indifference curves. Ordinality is the idea that utility can only be ranked, not measured in a cardinal sense.

The Assumption on Utility Functions That States That, If Two