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We tend to assume that consumption of goods is monotonically increasing: the more of a particular good we consume, the better off we are. However, that's not always the case. The "consumption" of pollution or illness, for example, is not monotonically increasing. All else being equal, we probably want less pollution and less illness. One interesting case of non-monotonicity is the case of bliss points, the perfect combination of goods.

For example, parents might think it's best to have two kids, and more specifically, to have one boy and one girl. Having anything other than one boy and one girl gives the parents less utility, it doesn't matter if it's 0 boys or 2 boys, 0 girls or 2 girls.

Let's say Blissful, the adopted eighth dwarf that Snow White didn't meet, has a bliss point for apples and diamonds: he wants exactly 7 apples (one a day, to keep the doctor away) and 11 diamonds. Each apple or diamond more or less from this optimal bundle of (7,11) decreases his utility by 1.

For example, having a bundle of (6,12) will decrease his utility by 2; 1 utility from having 1 less apple than optimal and another 1 utility from having 1 more diamond than optimal.

Which of the following preferences are true?

Select ALL that apply.

A

$(7,11) \succ (8,12)$

B

$(7,11) \succ (6,10)$

C

$(6,10) \prec (8,12)$

D

$(8,12) \prec (6,10)$

E

$(6,12) \sim (8,10)$

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