Tony loves philosophy books and candy bars

Economics Dec 12, 2020

Tony loves philosophy books and candy bars. When comparing two bundles Tony always chooses the bundle with more philosophy books regardless of the number of candy bars. However, when two bundles have equal philosophy books he chooses the one with more candy bars. Model his preferences.

Expert Solution

Marry loves diamond and silver. When comparing two bundles she always chooses the bundle with more diamond regardless of the number of silver. However, when two bundles have equal diamond she chooses the one with more silver.

Same is the case with Tony. Therefore, Tony has lexicographic preferences.

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