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  3. 1 bob consumes two types of goods he thinks that...

Question: 1 bob consumes two types of goods he thinks that...

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(1) Bob consumes two types of goods. He thinks that a consumption bundle (x1, x2) isatleastasgoodasabundle(y1,y2)ifandonlyifx1 ≥y1 andx2 ≥y2. Arehis weak preferences complete? Reflexive? Transitive? (2) Explain how it would be possible to exploit someone who had intransitive pref- erences. Be explicit about what you would offer her and what she would do in response. (3)(Condorcet’s paradox) A household formed by Mom (M), Dad (D), and Child (C) is deciding what to do on Friday evening. The alternatives are attending an opera (O), a rock concert (R), or an ice-skating show (I). The three members of the household have the following individual preferences: Mom: O ≻M R ≻M I, Dad: I≻D O≻D R, Child: R ≻C I ≻C O. The household makes pairwise comparisons between the alternatives using majority voting: the family strictly prefers one option over another if and only if at least two people would vote for it. Would the weak preferences formed by this household be complete? Reflexive? Transitive?

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