Question

Chris can choose plan a or plan b for his long distance charges. For each plan, cost (in dollars) depends on minutes used (per month) as shown below

Answer 1

Jeremy has a budget of $10 per week to spend on staying in touch with Jasmine. He can choose to call her on the land-line phone for $0.05 per minute or drive to see her at a round-trip cost of $2 in gasoline. His consumption choice budget constraint can be determined by calculating the options available to him based on his budget and the costs involved.

Step-by-step explanation:

Jeremy is trying to decide between using his land-line phone to call Jasmine or driving to see her. He has a budget of $10 per week to spend on staying in touch. The cost of a land-line call is $0.05 per minute and a round-trip drive costs $2 in gasoline. To determine his consumption choice budget constraint, Jeremy can spend his entire budget on either phone minutes or round trips, or he can choose a combination of the two. With a little algebra, we can calculate the options available to Jeremy based on his budget and the costs of phone calls and round trips.

Answer 2

(The whole question can be seen in the Attachment)

(a) Plan A , $6

(b) 160 minutes, Plan B

Step-by-step explanation:

(a)

If Chris makes 40 mins of calls for the month, which plan costs less?

In the graph, it can clearly be seen that for 40 mins, Plan A costs $4 while Plan B costs $10. So Plan A costs less.

How much less does it cost than the other plan?

Plan B cost $10 while Plan A costs $4. So Plan A costs $10-$4=$6 less than plan B

(b)

For what number of minutes both plans have the same cost?

We can see from the graph that both plans A and B coincide at 160 mins where the cost of both plans become $16

If the time spent on calls is more than this amount, which plan cost less?

Plan B costs less after time spent on call exceeds 160 mins.