A consumer’s preferences are _______________ if and only if between any two bundles, the consumer prefers the bundle which has more of at least one of the goods and no less of the other good as compared to the other bundle.
Answer & explanation
Correct answer: option 3
The correct answer is option 3: Monotonic
Monotonic preference: Consumer’s preferences are assumed to be such that between any two bundles (x1 , x2 ) and (y1 , y2 ), if (x1 , x2 ) has more of at least one of the goods and no less of the other good compared to (y1 , y2 ), then the consumer prefers (x1 , x2 ) to (y1 , y2 ). Preferences of this kind are called monotonic preferences. Thus, a consumer’s preferences are monotonic if and only if between any two bundles, the consumer prefers the bundle which has more of at least one of the goods and no less of the other good as compared to the other bundle.