The independence axiom implies that if I prefer a bottle of wine over a six pack of beer I will prefer half a bottle of wine with a bag of pretzels over half a sixpack of beer with a bag of pretzels.

Answer the following statement true (T) or false (F)


False

Rationale: The independence axiom is not an axiom about tastes over bundles of goods; it is an axiom about tastes over risky outcome bundles.

Economics

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