CA Foundation Exam  >  CA Foundation Questions  >  Suppose your friend is indifferent to the bun... Start Learning for Free
Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?
  • a)
    Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).
  • b)
    No. He has not reached his maximum level of satisfaction for Good-1 yet.
  • c)
    Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.
  • d)
    No. He has not reached his maximum level of satisfaction for either good.
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are...
If a consumer has monotonic preferences, he would prefer the bundle (6,6) to the bundle (4,6), because the bundle (6,6) has more of Good-1 as compared to the bundle (4,6)
View all questions of this test
Most Upvoted Answer
Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are...
Explanation:

To understand whether the preferences of your friend are monotonic or not, we need to analyze the given bundles and determine if there is a possibility for your friend to increase his satisfaction level for either Good-1 or Good-2.

Monotonic Preferences:
Monotonic preferences imply that an individual always prefers more of a good to less. In other words, if a bundle contains more of a good than another bundle, it is preferred.

Let's analyze the given bundles:

1. Bundle (4,6):
- Good-1: 4 units
- Good-2: 6 units

2. Bundle (6,6):
- Good-1: 6 units
- Good-2: 6 units

Analysis:

Based on the given information, we know that your friend is indifferent towards both bundles. This means that he considers both bundles to give him the same level of satisfaction. However, this does not necessarily mean that your friend has reached his maximum level of satisfaction for either Good-1 or Good-2.

Let's analyze the preferences for each good separately:

Good-1:
- Bundle (4,6) contains 4 units of Good-1.
- Bundle (6,6) contains 6 units of Good-1.

Since more units of Good-1 are present in Bundle (6,6), it is possible that your friend prefers more of Good-1. Therefore, it is incorrect to say that your friend has reached his maximum level of satisfaction for Good-1.

Good-2:
- Bundle (4,6) contains 6 units of Good-2.
- Bundle (6,6) also contains 6 units of Good-2.

Both bundles contain the same number of units for Good-2. Therefore, it is possible that your friend has reached his maximum level of satisfaction for Good-2. However, this does not imply that your friend's preferences are monotonic as he may still prefer more units of Good-1.

Conclusion:

Based on the analysis, it can be concluded that the preferences of your friend are not monotonic. He has not reached his maximum level of satisfaction for Good-1 yet, as he may still prefer more units of Good-1. Therefore, option (b) is the correct answer.
Explore Courses for CA Foundation exam
Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer?
Question Description
Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer?.
Solutions for Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer?, a detailed solution for Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?a)Yes. He has reached his maximum level of satisfaction for Good-2 at (4,6).b)No. He has not reached his maximum level of satisfaction for Good-1 yet.c)Yes. He has reached his maximum level of satisfaction for both Good-1 and Good-2.d)No. He has not reached his maximum level of satisfaction for either good.Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev