What baskets might he purchase if plan b is better for him

Reference no: EM131247193

Darrell has a monthly income of $60. He spends this money making telephone calls home (measured in minutes of calls) and on other goods. His mobile phone company offers him two plans:

• Plan A: Pay no monthly fee and make calls for $0.50 per minute.

• Plan B: Pay a $20 monthly fee and make calls for $0.20 per minute.

Graph Darrell's budget constraint under each of the two plans. If Plan A is better for him, what is the set of baskets he may purchase if his behavior is consistent with utility maximization? What baskets might he purchase if Plan B is better for him?

Reference no: EM131247193

Questions Cloud

Coordinates of a point in the domain : For the function f(x,y)=3x^2+6y^2+8/(9x^2-36y^2) a) Enter the coordinates of a point in the domain of f(x,y)? b) Enter the coordinates of a point not in the domain of f(x,y),with positive x-value?

What is a price consumption curve for a good : ow does a price consumption curve differ from an income consumption curve?

How would you explain this ex post return : Suppose that in the next period security Ri has earned only 5% over the preceding period. How would you explain this ex post return?

What most interested you about your classmate thread : Is there anything you want to add to your classmate's thread? Do you agree with your classmate's position? Why or why not? You will need to provide at least 1 article or website (.gov or .edu) that supports your position. Use in-text citations, as..

What baskets might he purchase if plan b is better for him : Graph Darrell's budget constraint under each of the two plans. If Plan A is better for him, what is the set of baskets he may purchase if his behavior is consistent with utility maximization? What baskets might he purchase if Plan B is better for ..

Compute the zero beta portfolios and the equations : Why is the separation principle still valid in a world with Nonmarketable assets? - Compute the zero-beta portfolios and the equations for the security market line for each investor.

Solve a quadratic equation : What is the formula to solve a quadratic equation?

Enter the coordinates of a point in the domain : a) Enter the coordinates of a point in the domain of f(x,y). b) Enter the coordinates of a point not in the domain of f(x,y),with positive x-value. c) Enter the coordinates of a point not in the domain of f(x,y)with negative x-value.

What will its sensitivity to the first factor become : If she rebalances her portfolio to keep the same expected return but reduce her exposure to inflation to zero (i.e., bp2 = 0), what will its sensitivity to the first factor become?

User Account

All Pages