Chapter 2

Chapter 2 - Chapter2 00:51 ConsumerTastesandPreferences...

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Chapter 2 00:51 Consumer Tastes and Preferences Consumer Preferences Economists begin by assuming that preferences are complete  in the sense  that all consumers would be able to decide whether they preferred the first  market “basket” to the second, whether they preferred the second to the first,  or whether they are indifferent between them Second, economists assume that the consumer’s preferences are transitive  –  that is, if he or she prefers Pepsi to Dr. Pepper. If that were not true, then his  or her preferences would not be transitive. they would, instead, be  contradictor and mutually inconsistent. o Preferences must be transitive Third, economists generally make a nonsatiation  assumption so that  consumers always prefer more of a commodity to less. That is, we assume that we can make consumer indifferent  between the two  alternatives.
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Chapter 2 - Chapter2 00:51 ConsumerTastesandPreferences...

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