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Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Question
Because of the [...], no two indifference curves for a given consumer can ever cross.
Answer
transitivity assumption

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Question
Because of the [...], no two indifference curves for a given consumer can ever cross.
Answer
?

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4
Question
Because of the [...], no two indifference curves for a given consumer can ever cross.
Answer
transitivity assumption
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Because of the transitivity assumption, no two indifference curves for a given consumer can ever cross.

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3. UTILITY THEORY: MODELING PREFERENCES AND TASTES
presents the consumer’s utility function. Any curve above and to the right represents a higher level of utility. Because of the completeness assumption, there will be one indifference curve passing through every point in the set. <span>Because of the transitivity assumption, no two indifference curves for a given consumer can ever cross. Exhibit 4 shows why. If bundle a and bundle b lie on the same indifference curve, the consumer must be indifferent between the two. If a and c lie on the same indifference curve, she mu

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