• Card 13 / 100: If Alice likes Snickers more than Milky Ways, does that mean she would always choose a Snickers over a Milky Way, if offered a choice between one or the other?

    Answer:
    No, because she might start out with more Snickers than Milky Ways. For example, if Alice starts out with (2 Snickers and 0 Milky Ways), she would rather obtain one additional Milky Way than one additional Snickers. The former gift would raise her to the 14th spot on her preference ranking, whereas the latter would raise her only to the 19th. (She would start at the 21st spot.) Note that in a sense, it's inaccurate to say "Alice likes Snickers more than Milky Ways" for this very reason, but of course in everyday language we speak like this all the time.

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Capitalism: The Market Economy

Access: Public Peer Review

Attribution:  Dr. Robert P. Murphy, Lessons for the Young Economist. (Mises Institute), http://mises.org/document/6215/Lessons-for-the-Young-Economist (Accessed 04 April, 2014). License: Creative Commons BY
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