6. Indifference curves and utility maximization Crystal is in a band and likes to advertise upcoming shows using flyers she posts around the city. Making one black-and-white flyer costs $0.02, and making a flyer in color costs $0.10. Crystal budgets $20.00 for making flyers each month. The following graph shows three of Crystal's indifference curves for the number of black-and-white and color flyers that she makes. Use the green line (triangle symbol) to plot Crystal's budget constraint. Then, place the black point (plus symbol) on the graph to indicate Crystal's optimal consumption choice given that budget constraint. At the optimum that you indicated on the graph, Crystal's marginal rate of substitution is equal to __________ (0.2/1/5/17.5 FLYERS) in black and white per flyer in color.
1000
006
Budget Constraint
800 FLYERS 700 600 500 BLACK-AND-WHITE 400 300 200
* Optimum
2
11
100
0
25 50 75 100 125 150 175 200 225 250 COLOR FLYERS