[20] 1, The telephone company allows one to choose between two different pricing plans. For a fee of $12 per month you can make as many local phone calls as you want, at no additional charge per call. Alternatively, you can pay $8 per month and be charged 5 cents for each local phone call that you make. Suppose that you have a total of $20 per month to spend.
a) Please draw a budget line for someone who chooses the first plan and a budget line for someone who chooses the second plan respectively in the same figure.(做题时注意,免得浪费时间) Where do the two budget line cross?
b) In the same figure, please draw indifference curves for someone who prefers the second plan to the first plan.