Question:
Sam enjoys collecting old editions of microeconomic theory books. Unfortunately, he has no income from employment, but he does accept bags of trash to be buried in his yard for a fee. Suppose the price of each old edition microeonomic book is $2, and San charges $1 for each bag of trash. Sam's utility is given by: U = min(2B, 20-T), where B is the number of old edition books, and T is the number of bags of trash collected by Sam. Note: U is the minimum of 2B and 20 - T, and so this is not a differentiable function.
A. With T on the vertical axis and B on the Horizantal axis, graph Sam's indifference curve for U = 4
B. Determine the values of B and T that maximize Sam's utility.