Consider the concept of revealed preference. Suppose a consumer chooses basket A over basket B when basket B costs the same amount. The consumer
A) must find basket A better than basket B .
B) must find basket B better than basket A .
C) must find basket A at least as good as basket B.
D) must find basket B at least as good as basket A .

Question

Quizplus · Accepted Answer

Revealed preference theory states that consumers choose the basket that they prefer, given their budget constraint. In this case, the consumer chose basket A over basket B when basket B costs the same amount. This means that the consumer must find basket A at least as good as basket B.

Consider the Concept of Revealed Preference