2. (13 points) Suppose that when a consumer goes out to eat he has a choice betw

Question

2. (13 points) Suppose that when a consumer goes out to eat he has a choice between pizza and salad, and chooses pizza. The next week at the same restaurant he has a choice between salad and tacos, and he chooses the salad. The following week, he returns to the same restaurant and has a choice between pizza and tacos, and he chooses the tacos. Assuming that the consumer is not indifferent between any of his choices (i.e. there are only strict preferences), decide which, if any, of the three assumptions about consumer preferences are violated.

Explanation / Answer

ans......
transitive assumption is violated because if Pizza > salad and salad> tacos.Then from transitive assumption pizza should be preferred over tacos which is violated.This transitive assumption is violated

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