Chapter 3 Questions: Consumer Preferences Violations
1. Which assumption about consumer preferences does each of the following individuals violate?
a. Randy likes basketball more than football; football more than baseball; and baseball more than basketball.
Randy Violates the Assumption of Transitivity
Explanation:
Consumer preferences play a crucial role in understanding how individuals make choices. There are several assumptions about consumer preferences, and each individual in the question violates a specific assumption. Let's analyze each case:
Randy: Randy violates the assumption of transitivity. According to the given information, Randy likes basketball more than football, football more than baseball, but it is not clear if Randy likes basketball more than baseball. If Randy violates transitivity, it means that he does not follow the logical pattern of preferences, which can make it challenging to predict his choices accurately.
Understanding these assumptions helps economists and marketers analyze consumer behavior and make informed decisions. By studying consumer preferences, businesses can tailor their products and marketing strategies to better meet the needs and desires of their target audience.