Question
Suppose you have recorded the consumption data of a consumer over several periods as follows: In period 1, (p1 , p2) = (2 , 2)
Suppose you have recorded the consumption data of a consumer over several periods as follows:
In period 1,
(p1 , p2) = (2 , 2) and he chooses: (x1 , x2) = (1 , 3)
what is the income he must be earning?
in period 2 and period 3, you recorded the consumption data of the same consumer again:
period 2 (p1 , p2) = (4 , 1) and he chooses: (x1 , x2) = (2 , 4)
period 3 (p1, p2) = (1.5 , 3.5) and he chooses (x1 , x2) = (3 , 3)
show that weather the consumer satisfies the Weak Axiom of Revealed Preferences (WARP) and Strong Axiom of Revealed Preferences (SARP) or not.
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