Question

    In the context of lexicographic utility functions,

    which of the following scenarios is impossible?
    A A consumer prefers 1 unit of good X over 10 units of good Y Correct Answer Incorrect Answer
    B A consumer is indifferent between 5 units of good X and 5 units of good Y Correct Answer Incorrect Answer
    C A consumer prefers 3 units of good X over 7 units of good Y Correct Answer Incorrect Answer
    D A consumer considers good Y only if the quantity of good X is equal Correct Answer Incorrect Answer

    Solution

    In lexicographic preferences, indifference between two different goods is impossible because the consumer has a strict ranking. They will always prefer one good over the other, regardless of the quantities.

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