Estimate the opportunity cost of making an additional 20 minutes of calls.
The Wishbone Cellular Phone Organization offers an optional package for calls whereby each month the subscriber gets the first 50 minutes of calls free, the next 100 minutes at $.05/min, and any additional time at the rate of $.10/minute. Draw the budget constraint for cellular phone calls and the composite good for a subscriber with an income of $80 per month.
For the Wishbone subscriber, what is the opportunity cost of making an additional 20 minutes of calls if he currently makes?
a) 40 minutes of calls each month?
b) 140 minutes of calls each month?