The local swimming pool charges nonmembers

$10.00 per visit. If you join the pool, you can swim for

$5.00 per visit but you have to pay an annual fee of F.

Use an indifference curve diagram to find the value of F such that you are indifferent between joining and not joining. For simplicity, assume that the price of all other goods is

$1.00. Suppose your indifference curves are illustrated in the figure to the right. For simplicity, also assume the individual has income of

$100.

1.) Using the line drawing tool,

draw the budget line when not joining. Label this line 'Upper L Superscript Not join.'

2.) Using the point drawing tool,

indicate the optimal consumption bundle for the individual from not joining. Label this point 'e Subscript Not join.'

3.) Using the line drawing tool,

draw the budget line when joining. Label this line 'Upper L Superscript Join.'

4.) Using the point drawing tool, indicate the optimal consumption bundle for the individual from joining. Label this point 'e Subscript Join.'