What must be true about the relationship between B and D?

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BlackTom AI · Accepted Answer

The question asks: What must be true about the relationship between B and D? 
Option a: 'The consumer strictly prefers B to D.' This asserts B is preferred over D. Without any context about B and D (indifference curves, bundles, or utility rankings), asserting a strict preference for B over D is not justified by the information given. If B and D were on some indifference curve with D preferred or if there were equal satisfaction, this option could be false. 
Option b: 'There is not enough information to know how the consumer compares the two goods.' This option would be considered if the data about preferences between B and D were insufficient. Since the problem statement provides a specific answer (the correct relation), this option would be inappropriate only if we actually have enough information to determine the relation. The given setup implies we do have enough information to determine the comparison, so this option is not consistent with the supplied context. 
Option c: 'The consumer strictly prefers D to B.' This statement asserts a clear preference for D over B. If the context (such as an underlying utility function or a revealed-preference example) supports that D yields strictly higher satisfaction than B for all considered bundles, this would be the correct relationship. The instruction in the prompt indicates this is the intended correct relation, and it aligns with a situation where D dominates B in terms of preference, utility, or higher satisfaction. 
Option d: 'The consumer is indifferent between the two goods.' Indifference means both goods give equal satisfaction. The claim of strict preference in option c would contradict indifference; since we are told to determine the must-be relationship, declaring indifference would require equal utility for B and D, which would not be consistent with a strict preference.

In summary, each alternative presents a distinct stance on how the consumer views B versus D. Option a asserts B is preferred, option b claims insufficient information, option c asserts D is preferred, and option d asserts indifference. Given typical economic reasoning about a determined relationship between two goods, options a, b, and d each carry scenarios that fail to capture a definitive strict preference of D over B, whereas option c correctly describes a strict preference of D to B when such a relationship is established by the underlying preferences or utility ordering. The reasoning for the other choices hinges on misinterpreting sufficiency of information, mischaracterizing the direction of preference, or assuming indifference where a strict preference exists.

ECC2000 - ECC5900 - S2 2025 ECC2000/5900 Mid-Semester Test - Quiz - 8 September 2025, opens 2pm (Melbourne, Australian time) duplicate

What must be true about the relationship between B and D?

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