ABSTRACT
Preferences refer to a consumer’s ability to compare or rank one commodity bundle over another. Because the idea of ranking one thing over another captures a relationship between two things, preferences are modeled using a mathematical concept called binary relations. For example, in a gathering of family members, “is a child of” relates any person to their mother or father, should they be present in the gathering. The property of reflexivity is something of a “sanity” requirement: for any “sane” person, it seems reasonable to require that any bundle must be at least as good as itself. Monotonicity of preferences helps to determine the direction in which preferences are increasing and also the direction in which they are decreasing. Preferences as binary relations are somewhat abstract and hard to visualize. One way to make them concrete is to focus on preferences that can be represented by a utility function.
