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In her economics course, Nancy has two exams. Her overall score for the course will be the maximum of her scores on the two exams. Nancy decides to spend a total of 400 minutes studying for these exams. If she spends m1 minutes studying for the first exam, her score on this exam will be x1 = m1/5. If she spends m2 minutes studying for the second exam, her score on this exam will be x2 = m2/10.
(a) On a graph with x1 on the horizontal axis and x2 on the vertical axis, draw Nancy’s “budget line” showing the various combinations of scores on the two exams that she can achieve with a total of 400 minutes of studying. On the same graph, draw two or three “indifference curves” for Nancy.
(b) Find the point on Nancy’s budget line that gives her the best overall score in the course. How much time will she spend studying for each of the exams? Which scores will she achieve on the two exams? What will be her overall score for the course?
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