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Show that the following preferences are not consistent for a rational individual.
i.An individual when confronted with prices of p₁ = $4 and p₂ = $8 chooses q₁ = 1 and q₂ = 5.
ii.The same individual facing prices of p₁ = $6 and p₂ = $9 chooses q₁ = 5 and q₂ = 3.
Control Group
In experimental research, the group that does not receive the experimental treatment, serving as a baseline to compare the effects of the treatment.
False Positives
An error in which a test incorrectly indicates the presence of a condition that is not actually there.
Type II Error
A statistical error that occurs when one fails to reject a false null hypothesis, also known as a false negative.
Difference-In-Difference
An estimator that identifies the causal effect of a treatment, like a special promotion, by comparing the periods before and after the treatment between an experimental group and a control group. The second difference is designed to remove selection bias.
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