Question

Flanders is an exceptional runner. Usually, the more he runs, the better he feels. However, he hits a “wall” after running for two hours. That is, once he runs for two hours, additional time spent running makes him worse off. After three hours of running he gets a “second wind” and running becomes enjoyable again. 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. Assume (only for this question!) that Flanders runs only on particular track outside the city. A round trip to the track requires him to drive a total of one hour. He is indifferent about driving (he does not like it, but he does not hate it either). Draw his new budget line on the diagram you used to answer question 1.
3. 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?
4. As he ages, Flanders gets less satisfaction from running (he still hits a wall between two and three hours of running.) What should change in the diagram you used to answer question 3?

Hint: Flanders does not have “well behaved” indifference curves.

Answer 1

yta sue aout

hau uoace LA Ceu

Lu ahs dilatam djr ture naa