Ralph Rigid likes to eat lunch at 12 noon. However, he also likes to save money so he can buy other consumption goods by attending the “early bird specials” and “late lunchers” promoted by his local diner. Ralph has 15 dollars a day to spend on lunch and other stuff. Lunch at noon costs $5. If he delays his lunch until t hours after noon, he is able to buy his lunch for a price of $5−t. Similarly if he eats his lunch t hours before noon, he can buy it for a price of $5−t.
(a) If Ralph eats lunch at noon, how much money does he have per day to spend on other stuff?
(b) How much money per day would he have left for other stuff if he ate at 2 P.M.?
(c) On the graph below, use blue ink to draw the broken line that shows combinations of meal time and money for other stuff that Ralph can just afford. On this same graph, draw some indifference curves that would be consistent with Ralph choosing to eat his lunch at 11 A.M.