Question

Flanders likes to run long races only. That is, he hates running for less than two...

Flanders likes to run long races only. That is, he hates running for less than two hours (each of the first 120 minutes of running make him worse than before) but, after 120 minutes of running, each additional minute of running makes him feel better. Flanders has eight free hours a day.

  1. Draw Flanders’s budget line between hours spent running (measured on the horizontal axis) and hours spent on other leisure activities (measured on the vertical axis). What is the slope of the budget line? What is the economic meaning of that slope?

  2. Flanders chooses to run five hours each day. Illustrate this in a budget line/Indifference curve diagram (make sure the time spent running is measured on the horizontal axis.) How does your diagram show he chooses to run five hours each day?

  3. As he ages, Flanders gets less satisfaction from running. That is, each minute he runs after the first 120 minutes still make him better off, but less than when he was younger. What should change in the diagram you used to answer question 2?

  4. Homer hates running for any amount of time. Assuming he has the same time constraints as Flanders, show his optimal choice in a budget line/indifference curves diagram.

Hint: Homers and Flanders do not have “well behaved” indifference curves.


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Answer #1

What is the slope of the budget line?

The slope of the budget line is the quantity of excellent two given up to possess an additional unit of an excellent one. The value {of one-off one} unit of excellent 1 is P1.to possess an additional unit of an excellent one, therefore, the consumption of excellent two should be reduced by P1 quantity. Now, with the P2 quantity, one unit of excellent two might are bought. So, with the P1 quantity, of excellent two might are bough

What is the economic meaning of that slope?

The construct of the slope is vital in economic science as a result of its wont to live the speed at that changes are going down. Economists usually inspect however things modification and regarding however one item modifications in response to a change in another item. It may show for instance however demand changes once value changes or however consumption changes once financial gain changes or however quickly sales are growing. Slope measures the speed of modification within the variable quantity because of the variable quantity changes.

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