4. Suppose Hank is shopping for a shirt, and the set of all possible alternatives consists of an American Eagle shirt, a Gap shirt, and a Hathaway shirt. (a) Using the notation from class, specify an example of a choice structure for the choice facing Hank that satisfies the Weak Axiom of Revealed Preference (WARP). Explain why it satisfies WARP. (b) Using the notation from class, specify an example of a choice structure for the choice facing Hank that violates the Weak Axiom of Revealed Preference (WARP). Explain why it violates WARP.

4. Suppose Hank is shopping for a shirt, and the set of all possible alternatives consists of an American Eagle shirt, a Gap shirt, and a Hathaway shirt. (a) Using the notation from class, specify an example of a choice structure for the choice facing Hank that satisfies the Weak Axiom of Revealed Preference (WARP). Explain why it satisfies WARP. (b) Using the notation from class, specify an example of a choice structure for the choice facing Hank that violates the Weak Axiom of Revealed Preference (WARP). Explain why it violates WARP.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 6P

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