#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Bomber enjoys, eating sausages. He also enjoys reading Shakespeare. Bomber is confronted with two baskets: Basket A, contains several goods and a package of sausages, and B, contains identical quantities of the other goods as Basket A, but instead of the sausages, it contains a book by Shakespeare.
When asked which basket she prefers, he replies, “I like them both, but sausages and a book by Shakespeare are so different that I cannot compare the two baskets.”
Determine whether Bomber is obeying all the axioms of preference theory.
Smith is violating the assumption of complete preferences.