Arnie has a job that requires him to travel three out of every four weeks. He has an annual travel budget and can travel either by train or by plane. The airline on which he typically flies has a frequent-traveler program that reduces the cost of his tickets according to the number of miles he has flown in a given year. When he reaches 30,000 miles, the airline will reduce the price of his tickets by 25 percent for the remainder of the year. When he reaches 50,000 miles, the airline will reduce the original price by 50 percent for the remainder of the year. For simplicity, assume initially that a mile of transportation by train costs the same amount as a mile of transportation by plane. Also assume that Arnie can afford to travel 100,000 miles by either train or plane at initial prices. Using the multipoint curve drawing tool, graph Amie's budget curve in the figure to the right. His budget curve will consist of three line segments. Label this curve 'BC'. Carefully follow the instructions above, and only draw the required object. Train Miles (1000s) 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- 04 0 40 80 120 Plane Miles (in 1000s) 160 200

Arnie has a job that requires him to travel three out of every four weeks. He has an annual travel budget and can travel either by train or by plane. The airline on which he typically flies has a frequent-traveler program that reduces the cost of his tickets according to the number of miles he has flown in a given year. When he reaches 30,000 miles, the airline will reduce the price of his tickets by 25 percent for the remainder of the year. When he reaches 50,000 miles, the airline will reduce the original price by 50 percent for the remainder of the year. For simplicity, assume initially that a mile of transportation by train costs the same amount as a mile of transportation by plane. Also assume that Arnie can afford to travel 100,000 miles by either train or plane at initial prices. Using the multipoint curve drawing tool, graph Amie's budget curve in the figure to the right. His budget curve will consist of three line segments. Label this curve 'BC'. Carefully follow the instructions above, and only draw the required object. Train Miles (1000s) 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- 04 0 40 80 120 Plane Miles (in 1000s) 160 200

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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