Weak Axiom of Revealed Preference
Question
2. (8 points) For Each of the following observations, check to see if the choices satisfy the Weak Axiom of
Revealed Preference (WARP). If it does satisfy WARP, give as much information about the consumer’s ranking of the bundles as possible. If it violates WARP, simply write “It violates WARP”.
a)
| Observation | PX | PY | X | Y |
| 1 | 3 | 1 | 2 | 4 |
| 2 | 1 | 4 | 4 | 1 |
| 3 | 3 | 2 | 2 | 3 |
b)
| Observation | PX | PY | X | Y |
| 1 | 1 | 5 | 3 | 2 |
| 2 | 3 | 2 | 2 | 1 |
| 3 | 2 | 4 | 1 | 4 |
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