Quest 4b on Sample exam 1

[Charlie Wood]

FYI-

After our session last night, I still couldn't figure out why Dr. Watson's answer to 4b was right. (How we know A > B.) I asked him about it before class today and he said that it involves revealed preferences, which we haven't covered yet and which won't be on the exam on Wednesday. (We're covering it today.)

-c

-- 

Charlie Wood

charli...@mail.utexas.edu

fortyyearoldfreshman.blogspot.com

+1-512-217-6551 (mobile)

[JHawes]

I think A>B because, if you look at the budget lines, bundle B(30,55)
is inside the budget line that contains point A. So, that means that
the consumer could buy the bundle B without using all of his income.
If you use the points of bundle B in the first budget line equation,
only $350 is spent (out of $450 income). That's why the consumer
prefers point A

On Feb 22, 11:00 am, Charlie Wood <charlie.w...@gmail.com> wrote:
> FYI-
>
> After our session last night, I still couldn't figure out why Dr. Watson's answer to 4b was right. (How we know A > B.) I asked him about it before class today and he said that it involves revealed preferences, which we haven't covered yet and which won't be on the exam on Wednesday. (We're covering it today.)
>
> -c
>
> --
>
> Charlie Wood

> charlie.w...@mail.utexas.edu
> fortyyearoldfreshman.blogspot.com
> +1-512-217-6551 (mobile)