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Can you please explain how the WARP was violated in this scenario? How does it violate WARP? You are given the following information from the

Can you please explain how the WARP was violated in this scenario? How does it violate WARP?

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You are given the following information from the Data Analysis Unit on the choice behaviour between medical services (MS) and other consumption spending (C) of the representative senior citizen in Canada. CHOICE #1: PMS = $15 Pc = $10 M = $2500 MS = 100 and C = 100. CHOICE #2: PMS = $10 Pc = $15 M = $2500 MS = 70 and C = 120. CHOICE #3: PMS = $10 Pc = $10 M = $2500 MS = 125 and C = 125. where PMs = price of medical services, Pc= price of other consumption, and M = income. a) In the MS-C space provided below carefully draw and label all three budget lines described by the data. Identify the chosen bundle of goods for each budget line (choice 1, choice 2, choice 3). [3 points] MS 250 250 PROBLEM #1 (continued): bj Given your diagram in part b), is the representative senior citizen behaving in a rational manner under all price combinations? Explain using the Weak Axiom of Revealed Preferences (WARP). [3 points]

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