2. Let the observed consumption bundles of a con-

sumer in period 0 and period 1 be x0 and x1, given

the price vectors p0 and p1 respectively.

(a) State the weak axiom of revealed preference

(WARP).

(b) Suppose that the following price and con-

sumption bundle combinations are observed

p0 = (1; 1; 2); x0 = (5; 19; 9)

p1 = (1; 1; 1); x1 = (12; 12; 12)

p2 = (1; 2; 1); x2 = (27; 11; 1)

i. Do the observed choices violate WARP.

ii. Do these choices violate the strong axiom

of revealed preference (SARP)?