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ch03 (1)

ch03 (1)

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Published by Umair Qazi
MICROECONOMIC THEORY
BASIC PRINCIPLES AND EXTENSIONS
EIGHTH EDITION
WALTER NICHOLSON
MICROECONOMIC THEORY
BASIC PRINCIPLES AND EXTENSIONS
EIGHTH EDITION
WALTER NICHOLSON

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categoriesTypes, School Work
Published by: Umair Qazi on Feb 19, 2013
Copyright:Attribution Non-commercial

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02/19/2013

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1
Chapter 3
PREFERENCES AND UTILITY
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
 
2
Axioms of Rational Choice
Completeness
 –
if A and B are any two situations, anindividual can always specify exactly one of these possibilities:
 A is preferred to B
B is preferred to A
 A and B are equally attractive
 
3
Axioms of Rational Choice
Transitivity
 –
if A is preferred to B, and B is preferred toC, then A is preferred to C
 –assumes that the individual’s choices are
internally consistent

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