Problem Code: 050609MICRO

[Amit Goyal]

A consumer consumes two goods 1 and 2 and his preferences are lexicographic
 
We define lexicographic preferences as follows: x bundle is weakly preferred to y bundle if x1 > y1 or (x1 = y1 and x2 >= y2). Then we say that the consumer prefers good 1 to good 2
 
Numerical example...
 We have a bundle x = (1,1) and y = (0,2) then x is preferred to y because x1 > y1
 Or x = (1,1) and y = (1,2) then y is preferred to x because x1 = y1 and x2 > y2
 
QUESTION
 
Lexicographic preferences are
1) Complete
2) Transitive
3) Continuous
 
Which of the following is true?
a) 1 and 3
b) 1 and 2
c) 2 and 3
d) None of the above

------------------------------posted by Vishruti

[nidhi]

answer d)none of the above as lexico graphic preferences arent complete or transitive because any 2 bundles are not always comparable

[Khushboo]

Ans- Option B  Lexicographic preferences are Complete and Transitive

[namrata]

ans is b..only continuity breaks down in case of lexicographic ordering

[vishruti]

namrata and khushboo your answer is correct