If we say a consumer has well-behaved preferences it means that:Group of answer choicesthere are no inferior goodspreferences only occasionally violate the transitivity assumptiona consumer always consumes products in fixed proportionsNone of the other answers are correct.the consumer's preferences are monotonic and convex in the quantity of each good consumed.

Preference Relations Recall and describe which are the main assumptions we as-sociate to well-behaved preferences. Discuss those in context, that is by also providingconcrete examples for when they are satisfied and for when they are violated.

If the tastes of a consumer satisfy the assumption of transitivity, her indifference curves must:Group of answer choicesNot cross the axesHave a positive slopeNot cross one anotherBend toward the originAll of the above

Inferior Good - A good that increases demand when consumer income decrease.Question 6AnswerTrueFalse

Consider the utility function . Tastes represented by this utility function:Group of answer choicesviolate transitivityviolate monotonicityviolate convexitysatisfy all the 5 assumptions that we introduced about tastessatisfy only completeness and transitivity

If a good is a Giffen good, thenGroup of answer choicesthere is no optimal level of consumption for the consumer.the demand curve is upward sloping.the demand curve is horizontal.the supply curve is downward sloping.