Which assumption or assumptions permits the derivation of the existence of a continuous utility function?
A) both rationality and continuity assumptions
B) only rationality assumptions
C) only continuity assumptions

Question

Quizplus · Accepted Answer

The derivation of a continuous utility function assumes both rationality and continuity assumptions. Rationality assumes that an individual's preferences are complete and transitive. Continuity, on the other hand, assumes that small changes in the levels of goods and services will result in small changes in utility. Together, these assumptions permit the derivation of a continuous utility function.

Which Assumption or Assumptions Permits the Derivation of the Existence