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#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Question
Given bundles A and B, a consumer must be able to say either that he prefers A to B, or she prefers B to A, or he is indifferent between the two.

This is the assumption of [...] also known as [...]
Answer
complete preferences (also known as the axiom of completeness)

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Question
Given bundles A and B, a consumer must be able to say either that he prefers A to B, or she prefers B to A, or he is indifferent between the two.

This is the assumption of [...] also known as [...]
Answer
?

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Question
Given bundles A and B, a consumer must be able to say either that he prefers A to B, or she prefers B to A, or he is indifferent between the two.

This is the assumption of [...] also known as [...]
Answer
complete preferences (also known as the axiom of completeness)
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she is able to make a comparison between any two possible bundles. That is, given bundles A and B, she must be able to say either that she prefers A to B, or she prefers B to A, or she is indifferentbetween the two. This is the assumption of <span>complete preferences (also known as the axiom of completeness), and although it does not appear to be a particularly strong assumption, it is not trivial either.<span><body><html>

Original toplevel document

3. UTILITY THEORY: MODELING PREFERENCES AND TASTES
ntity of one or more of the goods. For example, bundle Amight have the same amount of all but one of the goods and services as bundle B but a different amount of that one. Bundles A and B would be considered two distinct bundles. <span>Given this understanding of consumption bundles, the first assumption we make about a given consumer’s preferences is simply that she is able to make a comparison between any two possible bundles. That is, given bundles A and B, she must be able to say either that she prefers A to B, or she prefers B to A, or she is indifferentbetween the two. This is the assumption of complete preferences (also known as the axiom of completeness), and although it does not appear to be a particularly strong assumption, it is not trivial either. It rules out the possibility that she could just say, “I recognize that the two bundles are different, but in fact they are so different that I simply cannot compare them at all.” A lov

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