A Consumer's Behavior Was Observed in Three Situations with Different

question 31

Multiple Choice

A consumer's behavior was observed in three situations with different prices and incomes.In situation 1, she chose a bundle that cost $1,600.In situation 2, she chose a bundle that cost $2,500.In situation 3, she chose a bundle that cost $3,100.The bundle purchased in situation 2 would cost $1,200 at situation 1 prices.The bundle purchased in situation 3 cost $2,000 at situation 2 prices.This consumer's behavior is known to satisfy the strong axiom of revealed preference.Therefore, the bundle purchased in situation

• A)1 must cost less than $3,100 at situation 3 prices.
• B)3 must cost at least $3,100 at situation 1 prices.
• C)1 can not cost less than $3,100 at situation 3 prices.
• D)2 must cost at least $3,100 at situation 1 prices.
• E)None of the above.

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Definitions:

Type Of Car

Refers to classifications of cars based on characteristics such as make, model, body style, engine size, and usage purposes.

Nominal Level

The simplest level of measurement for variables, where data can be categorized but not ranked or ordered meaningfully.

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The frequency with which individuals or a demographic group attends church services.

SAT Scores

Scores obtained on the SAT, a standardized test widely used for college admissions in the United States, measuring proficiency in math, evidence-based reading, and writing.