7 Minutes to Master WARP, the Weak Axiom of Revealed Preference

[@InCaseofEconStruggles]

TEMPRARY CORRECTION (Until I upload an updated corrected version): In the graphical example, there's no reason why F, H, A, and E can't be picked with the new constraint. Even though the green dot is revealed preferred to those points, it would only violate WARP if those points were then picked when the green dot was available, which it is not under the new constraint. Sorry for the error and I will have a corrected version up soon!

[@InCaseofEconStruggles]

Here is the updated version: kzbin.info/www/bejne/oZnTnZ58nKmkqq8

[@soon6464]

question: old bundle (24,40), new bundle (20,60) old price (50,20), new price (80,25) chosen: old bundle+old price , new bundle+new price is there violation of warp in this question? because old price+new bundle was unaffordable so it wasn't chosen, but new price+old bundle is now affordable

[@InCaseofEconStruggles]

Based on those prices we would assume that the money you had to spend increases from the old period to the new period because the new bundle at the new prices costs more than the old bundle at the old prices exactly as you point out so this is not a warp violation. Good question though!

[@soon6464]

@ thanks it helps a lot😁

[@InCaseofEconStruggles]

Awesome I’m glad that helped!

[@wanokuni5548]

How do we know that F H A E C G were affordable initially?

[@InCaseofEconStruggles]

That is exactly the issue! I posted an updated warp video (it’s currently the newest video) and I will drop a link below where I corrected that error. Im glad you were able to see that

[@InCaseofEconStruggles]

Here is the updated version: kzbin.info/www/bejne/oZnTnZ58nKmkqq8

[@wanokuni5548]

​@@InCaseofEconStruggles Thank you for the clarification