Chinese restaurant .The local guy offered to take them to an Italian restaurant for $1. Would the group agree? (f) (Level A) When the arrived at the door of the Italian restaurant, the local guy then offered, for another $1, to take them to an Indian restaurant. Would the group agree 27 (g) (Level A) Now that they were outside an Indian restaurant, the local guy offered, for yet another $1, to take them back to the original Chinese restaurant. Would the group agree ? (h) (Level A) What would happen if the local guy kept making the above offers (in that particular sequence )'? Question 2 Suppose there are only two goods: Beer and Milk. Tom's preference over bundles of beer and milk is as follows: for any two bundles A : (bA,mA) and B : (133, m B) (where b and m denotes the amount of beer and milk, respectively ), A f, B if and only if: Either : bA > 133; Or: bA: b3 and mA ZmB. In other words, Tom cares first and foremost the amount of beer, but if the two bundles contain the same amount of beer, then he prefers having more milk to less. (a) (Level B) Is Tom's preference complete? If yes, show why; if no, give an example of two bundles between which Tom cannot compare. (b) (Level B) Is Tom's preference transitive? If yes, show why; if no, give an example of three bundles among which the comparisons become cyclical (c) (Level B) Consider the following bundles: A: (5,3) B : (5,2) 0: (4,2) Argue that there is no point on the line between B and C that is indifferent to A. Conclude from your answer that Tom's preference is not continuous. ((1) (Level A) Under a lexicographic preference, can two distinct bundles be indifferent to each other? Why or why not