A question from MWG 2F12 This question is from MWG
if walrasian demand function is generated by a rational preference relation then it must satisfy weak axiom.
I cannot prove this statement. How can I do?Thanks alot.
&quot;If the new bundle was affordable at old prices, and the new and old bundles aren't equal, then the old bundle must not be affordable at the new prices&quot;.
In other words, the Weak Axiom of Revealed Preference (WARP) refers to consistent (rational) decision-making.
I think the proof is in terms of an 'if then' direct method:
The Marshallian demand function $x(p,w)$ satisfies WARP if the following property holds for any two price-wealth situations $(p,w)$ and $(p',w')$.
If $p*x(p',w')\leq w$ and $x(p,w)\neq x(p',w')$ then: $p'*x(p,w)&gt;w'$.