Problem
Darrell has a monthly income of $60. He spends this money making telephone calls home (measured in minutes of calls) and on other goods. His mobile phone company offers him two plans:
• Plan A: Pay no monthly fee and make calls for $0.50 per minute.
• Plan B: Pay a $20 monthly fee and make calls for $0.20 per minute.
Graph Darrell's budget constraint under each of the two plans. If Plan A is better for him, what is the set of baskets he may purchase if his behavior is consistent with utility maximization? What baskets might he purchase if Plan B is better for him?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.