When prices are ($4, $2), Tomoko chooses the bundle (9, 18), and when prices are ($1, $2), she chooses the bundle (8, 14).
A)The bundle (8, 14)is revealed preferred to the bundle (9, 18)and she does not violate WARP.
B)She violates SARP but not WARP.
C)The bundle (9, 18)is revealed preferred to the bundle (8, 14)and she does not violate WARP.
D)She violates WARP.
E)None of the above.

Question

Quizplus · Accepted Answer

To check if Tomoko violates WARP, we compare the bundles chosen at both price pairs.

At $4, $2: Tomoko chooses (9, 18) 
At $1, $2: Tomoko chooses (8, 14)

Since she chooses (9, 18) at the higher price and (8, 14) at the lower price, we can conclude that (9, 18) is revealed preferred to (8, 14). Therefore, Tomoko does not violate WARP.

Option A is incorrect because it claims that (8, 14) is revealed preferred to (9, 18), which is contrary to what we just proved. Option B is incorrect because it claims that Tomoko violates SARP, but the question only asks about whether Tomoko violates WARP. Option D is incorrect because we have demonstrated that she does not violate WARP.

When Prices Are ($4, $2), Tomoko Chooses the Bundle (9