Microeconomics

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Jane receives utility from days spent traveling on vacation domestically (D) and days spent traveling on vacation in a foreign country (F), as given by the utility functionU(D,F) = 10DF.

In addition, the price of a day spent traveling domestically is $100, the price of a day spent traveling in a foreign country is $400, and Jane’s annual travel budget is $4000.

a. Illustrate the indifference curve associated with a utility of 800 and the indifference curve associated with a utility of 1200.

b. Graph Jane’s budget line on the same graph.

c. Find Jane’s utility maximizing choice of days spent traveling domestically and daysspent in a foreign country.

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