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Exercises · Q13

Q.Suppose your friend is indifferent to the bundles (5,6)(5, 6) and (6,6)(6, 6). Are the preferences of your friend monotonic?

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Monotonic preferences require that more of at least one good (with no less of the other) is strictly preferred. Since your friend is indifferent between (5,6)(5,6) and (6,6)(6,6) — bundles where the second has strictly more of one good — the preferences violate monotonicity.

Understanding Monotonic Preferences

Monotonicity is one of the foundational assumptions about rational consumer behavior. It captures a simple intuition: if you give someone more of something they value (or at least don't dislike), without taking anything else away, they should be better off — or at the very least, no worse off.

Formally, preferences are monotonic if whenever bundle AA contains at least as much of every good as bundle BB, and strictly more of at least one good, then the consumer strictly prefers AA to BB. In symbols, if A=(x1A,x2A)A = (x_1^A, x_2^A) and B=(x1B,x2B)B = (x_1^B, x_2^B) with x1A≥x1Bx_1^A \geq x_1^B, x2A≥x2Bx_2^A \geq x_2^B, and at least one inequality strict, then A≻BA \succ B (A is strictly preferred to B).

The economic reasoning is straightforward: goods are desirable. A consumer who obeys monotonicity never throws away free goods; more is always weakly better, and strictly more of something (holding everything else constant) is strictly better.

Applying the Test to Your Friend's Preferences

Now look at the two bundles your friend is considering:

  • Bundle B1=(5,6)B_1 = (5, 6): 5 units of good 1, 6 units of good 2
  • Bundle B2=(6,6)B_2 = (6, 6): 6 units of good 1, 6 units of good 2

Compare them component by component. Bundle B2B_2 has one more unit of good 1 than B1B_1 (6 versus 5), while the quantity of good 2 is identical in both (6 units). So B2B_2 contains everything B1B_1 has, plus an extra unit of good 1.

If your friend's preferences were monotonic, she should strictly prefer B2B_2 to B1B_1 — after all, she's getting more of good 1 at no cost to good 2. But the question tells us she is indifferent between the two bundles: (5,6)∼(6,6)(5,6) \sim (6,6). She views them as equally desirable. …

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