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7. In a two-good world, suppose that a consumer's observed purchases in two periods are as follows: Period I Period II Quantity Price Quantity Price

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7. In a two-good world, suppose that a consumer's observed purchases in two periods are as follows: Period I Period II Quantity Price Quantity Price good 1 100 100 120 100 good 2 100 100 ? 80 Over what range of quantities of good 2 consumed in period II would you conclude: (a) That the consumer's behavior contradicts WARP (the weak axiom of revealed preferences). For the next sub-questions, assume that WARP is satisfied. (b) That the bundle in period I is revealed preferred to that of period II. (c) That the bundle in period II is revealed preferred to that of period I. (d) That good 1 is an inferior good (at some price). (e) That good 2 is an inferior good (at some price)

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