5. Indifference curves and utility maximization Ginny 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. Ginny budgets $40.00 for making flyers each month.
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The following graph shows three of Ginny’s indifference curves for the number of black-and-white and color flyers that she makes. Use the green line (triangle symbol) to plot Ginny’s budget constraint. Then, place the black point (plus symbol) on the graph to indicate Ginny’s optimal consumption choice given that budget constraint.
Budget Constraint Optimum
BLACK AND WHITE FLYERS 0 + 0 + 25 + 50 + 75 175 200 225 250 100 125 150 COLOR FLYERS
At the optimum that you indicated on the graph, Ginny’s marginal rate of substitution is equal to in black and white per flyer in color. Grade It Now Save & Continue Continue without saving. Get Economics homework help today