GENERAL KNOWLEDGE

Detailed explanation-1: -revealed preference theory, in economics, a theory, introduced by the American economist Paul Samuelson in 1938, that holds that consumers’ preferences can be revealed by what they purchase under different circumstances, particularly under different income and price circumstances.

Detailed explanation-2: -Samuelson’s revealed preference theory also marks an advance over the earlier theories of demand by giving up the dubious assumptions underlying them. Both the Marshallian utility analysis and Hicks-Allen indifference curve theory were based upon the utility-maximisation postulate.

Detailed explanation-3: -The revealed-preferences method involves determining the value that consumers hold for an environmental good by observing their purchase of goods in the market that directly (or indirectly) relate to environmental quality.