Which one of the following sequences of specifications of relative preferences for bundles of goods A, B, and C by a consumer indicates the property of transitivity (where "" indicates that the preferred bundle is on the left, " B; B C; C A B) A B; B = C; C = A C) A C; A B

Question

Which one of the following sequences of specifications of relative preferences for bundles of goods A, B, and C by a consumer indicates the property of transitivity (where ">" indicates that the preferred bundle is on the left, "<" indicates that the preferred bundle is on the right, and "=" means indifference between the bundles)? A) A > B; B > C; C > A B) A > B; B = C; C = A C) A < B; C < A; B > C D) A = C; B > C; A > B

Quizplus · Accepted Answer

Transitivity in consumer preferences means if a consumer prefers A over B and B over C, then the consumer should also prefer A over C. Option C (A < B; C < A; B > C) is the only sequence that satisfies this condition, as it implies A is preferred over C through the transitive relation (B is preferred over C, and A is less preferred than B, making B preferred over both A and C in a consistent manner).

Which One of the Following Sequences of Specifications of Relative