Randy likes baseball more than football, football more than basketball, and basketball more than baseball. Which assumption about consumer preferences does this violate?

I. Completeness
II. Monotonicity
III. Transitivity
IV. Diminishing marginal utility

Question

Randy likes baseball more than football, football more than basketball, and basketball more than baseball. Which assumption about consumer preferences does this violate?

I. Completeness
II. Monotonicity
III. Transitivity
IV. Diminishing marginal utility

BlackTom AI · Accepted Answer

Consider the given scenario where Randy's preferences form a cycle: baseball > football, football > basketball, and basketball > baseball.
Option I: Completeness. This assumption says that for any two goods, a consumer can state a clear preference or be indifferent. The three-way cycle doesn't immediately demonstrate incompleteness between any two specific items, but the cycle does raise questions about the ability to compare all pairs consistently. In some interpretations, the cycle could still leave completeness intact for each pair, though the global pattern is problematic.
Option II: Monotonicity. This usually refers to more of a good being preferable to less of it, given other things equal. The cyclic preference among distinct goods (baseball, football, basketball) doesn't directly address monotonicity with respect to a single good; it instead concerns cross-good comparisons. Therefore, monotonicity is not clearly violated by the cycle as stated.
Option III: Transitivity. This is the key issue here. Transitivity requires that if A > B and B > C, then A > C. The cycle baseball > football, football > basketball, and basketball > baseball implies baseball > baseball, which cannot hold in a consistent, transitive preference ordering. This directly violates transitivity.
Option IV: Diminishing marginal utility. This concept relates to how additional units of a good yield smaller additional satisfaction. The given preferences do not address quantities or marginal changes for a single good, so diminishing marginal utility isn’t being tested here.
In summary, the cyclic ranking among the three distinct goods creates a contradiction with the transitivity condition, while the other assumptions do not readily align with the information provided. The structure of the preferences as stated is the central reason transitivity is violated, rather than completeness, monotonicity, or diminishing marginal utility.

ECON3200001.1251 Pre-class Quiz 1

Randy likes baseball more than football, football more than basketball, and basketball more than baseball. Which assumption about consumer preferences does this violate? I. Completeness II. Monotonicity III. Transitivity IV. Diminishing marginal utility

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