Sunday
April 19, 2015

Homework Help: economics-Budget Constraint & Utility

Posted by Victor on Monday, October 26, 2009 at 9:16pm.

Sally is a frequent flyer whose fares are reduced through coupon offerings. She receives a 20% reduction on fares after she flies 20,000 miles, and 40% reduction after she flies 40,000 miles.
a) Illustrate her budget constraint.
b) Illustrate how her level of utility will change given these frequent-flyer coupons.

==========================
I am very confused by this question. Here we are asked to find the budget constraint, but I am not even sure what the two goods are...what are the goods that should be plotted on the vertical and horizontal axes? Will the budget line be a straight line? How would the coupons change the budget line?

Can someone please help me?
Thank you very much!

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Microeconomic - The Urban Transit Authority receives the following two pieces of...
Math (Algebra 2) - A population of flies grows according to the function p(x) = ...
Math - A population of flies grows according to the function p(x)=2(4)^x, where ...
Math III - 1. Traci purchases a car for $16,000. If its depreciates by 12% per ...
Budget constraint - X=view of the sea Y=wine Price of X: Px=0 Price of Y: Py=5 ...
algebra - Researchers use formula f(t) = Pe^rt to model the population of fruit ...
Physics - Two steam locomotives are approaching each other, each at 30 mi/hr, ...
physics - Two steam locomotives are approaching each other, each at 30 mi/hr, ...
trig - Two Airplanes leave an airport at the same time on different runways. One...
Math, HELP!! PLEASE! IMMEDIATELY! - After a 25% reduction, you purchase a ...

Members