Each of the Following Consumers Exhibit Behavior That Violates One

question 27

Essay

Each of the following consumers exhibit behavior that violates one of the basic assumptions of consumer preferences. Identify the assumption that is violated for each individual.
∙ Art says that he can watch 2 movies a week but couldn't be paid to watch another movie after that.
∙ Alex says that he prefers going to a movie over hiking. He also indicates that he prefers hiking to swimming. Alex then states that he would rather go swimming than go to a movie.
∙ Alicia says that she prefers hiking to watching a movie but can't determine her preferences for swimming.

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, including the balance sheet, income statement, and statement of cash flows.

Overhead Controllable Variance

The difference between the actual overhead incurred and the overhead that management expected or budgeted for, which is within their control.

Budgeted Costs

Estimated expenses planned for a set period of time, forming the basis of a budget for managing a business's or project's financial resources.

Materials Price Standard

Pre-determined cost at which materials should be bought, used for budgeting and assessing purchasing performance.