“If a good is inferior, a rise in its price will cause people to buy more of it, thus violating the law of
demand.” True or false? Explain.
Which of the following descriptions of consumer
behavior violates the assumption of rational preferences? Explain briefly.
a. Joseph is confused: He doesn’t know whether
he’d prefer to take a job now or go to college
full-time.
b. Brenda likes mustard on her pasta, in spite of the fact
that pasta is not meant to be eaten with mustard.
c. Brewster says, “I’d rather see an action movie than
a romantic comedy, and I’d rather see a romantic
comedy than a foreign film. But given the choice, I
think I’d rather see a foreign film than an action
movie.”