Question

Suppose a consumer's preferences are monotonic. What can you say about her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?

Answer 1

Monotonic preference refers to a situation where the consumer prefers a bundle which has more of every good. In this case, the consumer's preference ranking can be explained as-

1. The most preferred bundle would be (10, 10).
2. Consumer's second preferred bundle would be (10, 9)
3. The third preferred bundle would be (9, 9).

The first combination offers higher level of satisfaction, and the consumer must prefer it to the other.