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Homework (Ch 21) 6. Indifference curves and utility maximization Beth is in a band and likes to advertise upcoming shows using flyers she posts around
Homework (Ch 21) 6. Indifference curves and utility maximization Beth is in a band and likes to advertise upcoming shows using flyers she posts around the city. Making one black-and-white flyer costs $0.05, and making a flyer in color costs $0.20. Beth budgets $40.00 for making flyers each month. The following graph shows three of Beth's indifference curves for the number of black-and-white and color flyers that she makes. Use the green line (triangle symbol) to plot Beth's budget constraint. Then, place the black point (plus symbol) on the graph to indicate Beth's optimal consumption choice given that budget constraint. 1000 A 900 Budget Constraint 800 700 600 Optimum AND-WHITE FLYERS 500 4001000 A 900 Budget Constraint 800 700 Optimum 600 500 BLACK-AND-WHITE FLYERS 400 300 N 200 100 25 50 5 100 125 150 175 200 225 250 COLOR FLYERS At the optimum that you indicated on the graph, Beth's marginal rate of substitution is equal to in black and white per flyer in color
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