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Questions
What do you mean by monotonic preferences?
What are monotonic preferences?
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Solution
It means that the consumer prefers a particular bundle over the other bundle if the former consists of at least more of one good and no less of the other good. Example:
If bundle A(3, 5) and bundle B(3, 2) are available to the consumer, then he/she will prefer bundle A over bundle B as bundle A consists of more units of good 2 than bundle B.
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RELATED QUESTIONS
What is meant by monotonic preferences?
If the consumer has monotonic preferences, then can he/she be indifferent towards bundles (10, 8) and (8, 6)?
Suppose a consumer’s preferences are monotonic. What can you say about his/her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?
Suppose your friend is indifferent to the bundles (5, 6) and (6, 6). Are the preferences of your friend monotonic?
Answer the following question:
How would the demand for a commodity be affected by a change in the "tastes and preferences" of the consumers in favour of the commodity? Explain using a diagram.
Explain the following condition:
Shift from a lower to a higher indifference curve.
