Economics · Consumer Theory - Revealed Preference Theory

Arrange the following statements in the correct logical sequence that builds the framework of Paul Samuelson's Revealed Preference Theory, from its foundational observation to its ultimate theoretical application: A. The Weak Axiom of Revealed Preference (WARP) establishes a central consistency condition stating that if bundle A is revealed preferred to bundle B, then B cannot be revealed preferred to bundle A. B. The Strong Axiom of Revealed Preference (SARP) extends this behavioral consistency to cover sequences or chains of choices, ensuring transitivity. C. The establishment of transitivity allows the complete reconstruction of well-behaved demand functions without relying on introspection or psychological utility functions. D. Based on observability, if a consumer is observed to choose bundle A when bundle B is also affordable under their budget constraint, then A is revealed to be preferred to B.