According to Revealed Preferences,if a Consumer chooses a more expensive bundle of goods over a cheaper bundle of goods,we can conclude
A)the consumer prefers the more expensive bundle of goods.
B)the consumer is behaving irrationally.
C)the consumer is unaware of the cheaper bundle of goods.
D)the consumer has convex preferences.

Question

Quizplus · Accepted Answer

Revealed Preferences theory suggests that a consumer's preferences can be inferred from their observed choices. Therefore, if a consumer chooses a more expensive bundle of goods over a cheaper bundle, it reveals that the consumer prefers the more expensive bundle. This is because if the consumer preferred the cheaper bundle, they would have chosen it instead. Thus, the answer is A.

According to Revealed Preferences,if a Consumer Chooses a More Expensive