Q13 of 26 Page 34

Suppose your friend is indifferent to the bundles (5, 6) and (6, 6). Are the preferences of your friend monotonic?

In the given case it shows that the preference of my friend is not monotonic. As he is indifferent towards both the bundles means both the bundles give him same level of satisfaction and so he has assigned them the same rank.

According to the monotonic preference second bundle would have been preferred as it contains more of both the goods.


More from this chapter

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11

If a consumer has monotonic preferences, can she be indifferent between the bundles (10, 8) and (8, 6)?

 12

Suppose a consumer’s preferences are monotonic. What can you say about her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?

 14

Suppose there are two consumers in the market for a good and their demand functions are as follows:

d1(p) = 20 – p for any price less than or equal to 20, and d1(p) = 0 at any price greater than 20.


d2(p) = 30 – 2p for any price less than or equal to 15 and d1(p) = 0 at any price greater than 15.


Find out the market demand function.

 15

Suppose there are 20 consumers for a good and they have identical demand functions:

d(p) = 10 – 3p for any price less than or equal to 10/3 and d1(p) = 0 at any price greater than 10/3.


What is the market demand function?