Draw bob budget line for visits to the salon

Reference no: EM131789887

Question: Bob goes to the tanning salon 20 times a month. His income is $1,000 per month and his visits to the salon cost $8 per visit.

a. Draw Bob's budget line for visits to the salon and all other goods, show the consumption bundle that maximizes his satisfaction, and draw the indifference curve through that point.

b. Recently, a new tanning club opened which offers identical facilities but which charges a flat fee of $120 per month plus an additional $2 per visit. Draw Bob's budget line if he were to join this new club.

c. Would Bob continue to go to the old salon or would he join the new tanning club. Why?

Reference no: EM131789887

Questions Cloud

What is the safety stock and target inventory level : What is the safety stock? What is the Target inventory level (T)?

Average annual earnings of the salespersons : Over what interval (involving a, b, or c) is there an increase in f(x), the average annual earnings of the salespersons?

Write a program for multiplication of two matrices in c++ : Write a Program for multiplication of two matrices in c++

What is the approximate mean number of televisions : Judging from the histogram, what is the approximate mean number of televisions in the homes in this collection? Explain.

Draw bob budget line for visits to the salon : Draw Bob's budget line for visits to the salon and all other goods, show the consumption bundle that maximizes his satisfaction, and draw the indifference.

How the preceeding post balance sheet events be reflected : Instructions: Discuss how the preceeding post balance sheet events should be reflected in the 2012 financial statements

Calculate the process capability index : Calculate the process capability index for this example.

Critical points as relative maxima : Classify the critical points as relative maxima, relative minima, or horizontal points of inflection. In each case, you may check your conclusions

Analysis of payback period and net present value : Break into teams and identify four reasons that an international airline such as Southwest or Delta would invest in a project when its direct analysis.

User Account

All Pages