I'm taking an introductory microeconomics course and have been introduced to the 3 axioms of economic preferences. These include
My understanding of non-satiation is incomplete. This is because of how the lecturer has described it. I am told that non-satiation means
- More is better
- Indifference curves further from the origin are better
From some research on the internet I find that non-satiation is also known as the Axiom of Dominance, described as:
If any combination A has more of one or of both the goods than B, then it is said A dominates B. This axiom states that if A dominates B, then the consumer will prefer A to B. This axiom is also known as the axiom of non-satiation or of monotonicity.
Given this, my understanding is that given 2 bundles $A(x,y)$ and $B(a,b)$, $A > B$ if $x > a$ and $y > b$.
- Q1) Is my understanding correct?
- Q2) What if $x<a$ but $y>b$? Is the agent indifferent? He will have to be, otherwise completeness will be violated?
Thanks for your help.