Kate and Johnny are looking for furniture for their house

Answer : False. Johnny does not have rational preference.

Reason :

For an individual to have rational preference, his or her preference must have the following two characteristics : Completeness and Transitivity.

Completeness means that when a consumer is faced with options between commodities, that individual can rank those options by his/her preference.

Transitivity means that when a consumer prefers B to C, and A to B, then he will also prefer A to C.

In this situation, Johnny prefers mint green to olive green, pistachio green and pickle green. He also prefers shamrock green and pear green to mint green. Therefore, according to his preferences, the options can be ranked from most preferred to least preferred. Thus, his presence has Completeness.

On the other hand, after buying pear green furniture, Johnny goes back and exchanges it with pistachio green. Since he preferred mint green to pistachio green, and pear green to mint green, we can say that he is violating the Transitivity by choosing pistachio green. Thus, his preferences are not Transitive.

Since, his preferences are only Complete and not Transitive, we can say that Johnny does not have rational preference.