An individual likes owning cars is better

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Reference no: EM138268

Q. Consider two goods that are perfect complements. For instance, car frames and tires. An individual likes owning cars is better. In order to own a car, an individual must have a 1:4 ratio of frames to tires. Any spare frames or tires that are outside this ratio do not benefit in any way. The personage is comparing bundles that contain both car frames and tires. Thus, we are comparing 2-good bundles. For instance (2.5 frames, 2 tires). Explain how many of the following properties do the individual's preferences necessarily display? Please note that fractional cars can exist (for instance, 1.5 frames and 6 tires are equivalent to 1.5 cars).

• Monotonicity

• Local-nonsatiation

• Transitivity

• Completeness

• Symmetry

Reference no: EM138268

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