<p>So WARP says that if bundle x' you choose under budget B' is affordable at budget B'' (and you don't choose x' - i.e x'$\not=$x''), then x'' cannot be affordable under budget B'.</p>

<p>The picture you showed gives the 2 bundles that the person chooses. Those are given in the picture. As you can see, x' is not affordable at budget B'' and bundle x'' is not affordable at budget B', so WARP is satisfied. </p>

<p>If you are reading MWG and you don't understand what those dots represent in the consumption space, then I would recommend reading more from the beginning of chapter 2. </p>

CC BY-SA 3.0
2016-09-23T11:16:28.040Z
2016-09-23T11:16:28.040Z
VCG
<blockquote>
  <p>The Walrasian demand function $x(p,w)$ satisfies the weak axiom of revealed preference if the following property holds for any two price wealth situations $(p,w)$ and $(p',w')$:
  If $p•x(p',w')\le w$ and $x(p',w')\ne x(p,w)$, then $p'•x(p,w)&gt;w'$.
  Where $x$ is the amount of commodity, $p$ is price and $w$ is wealth.</p>
</blockquote>

<p>The book(MWG's Microeconomics Theory, Page 29-30) says that the graph below satisfies the weak axiom. I have difficulty in understanding the graph. To be specific, I don't know why there is a dot in each of the budget set and I can't understand why it satisfies the weak axiom. <img src="https://i.sstatic.net/dbt0b.jpg" alt="enter image description here"></p>

<microeconomics><supply-and-demand><walrasian>
Whether the demand in the panels satisfies the weak axiom
Rowan
# Whether the demand in the panels satisfies the weak axiom

(Asked by: username_0 on 2016-09-23)

> The Walrasian demand function $x(p,w)$ satisfies the weak axiom of revealed preference if the following property holds for any two price wealth situations $(p,w)$ and $(p',w')$:
> If $p•x(p',w')\le w$ and $x(p',w')\ne x(p,w)$, then $p'•x(p,w)>w'$.
> Where $x$ is the amount of commodity, $p$ is price and $w$ is wealth.

The book(MWG's Microeconomics Theory, Page 29-30) says that the graph below satisfies the weak axiom. I have difficulty in understanding the graph. To be specific, I don't know why there is a dot in each of the budget set and I can't understand why it satisfies the weak axiom. ![enter image description here](https://i.sstatic.net/dbt0b.jpg)

**Tags:** microeconomics, supply-and-demand, walrasian

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## 1 answers

### Answer by username_1 on 2016-09-23. Score: 2 | Accepted answer

So WARP says that if bundle x' you choose under budget B' is affordable at budget B'' (and you don't choose x' - i.e x'$\not=$x''), then x'' cannot be affordable under budget B'.

The picture you showed gives the 2 bundles that the person chooses. Those are given in the picture. As you can see, x' is not affordable at budget B'' and bundle x'' is not affordable at budget B', so WARP is satisfied.

If you are reading MWG and you don't understand what those dots represent in the consumption space, then I would recommend reading more from the beginning of chapter 2.


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