Your income is $100 a month You sign up for a telephone plan that costs $10 a month plus 10 cents per call 18 Once you've signed up for the phone plan, draw your budget constraint between phone calls and all other goods , with all other goods measured in dollars 19 Now suppose the phone company offers an alternative plan that costs $20 a month plus 5 cents per phone call You like this plan better so you switch after switching, you make fewer calls per month Illustrate this situation with indifference curves 20 True or False Given the information in question 19, phone calls must be a Giffen good for you 21 True or False Given the information in question 19, phone calls must be an inferior good for you

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Your income is $100 a month  You sign up for a telephone plan that costs $10 a month plus 10 cents per call  18  Once you've signed up for the phone plan, draw your budget constraint between phone calls and  all other goods , with  all other goods  measured in dollars  19  Now suppose the phone company offers an alternative plan that costs $20 a month plus 5 cents per phone call  You like this plan better so you switch  after switching, you make fewer calls per month  Illustrate this situation with indifference curves  20  True or False  Given the information in question 19, phone calls must be a Giffen good for you  21  True or False  Given the information in question 19, phone calls must be an inferior good for you

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Your income is $100 a month. You sign up for a telephone plan that costs $10 a month plus 10 cents per call. 18. Once

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