Remember our friend Ralph Rigid from Chapter 3? His favorite diner, Food for Thought, has adopted the following policy to reduce the crowds at lunch time: if you show up for lunch t hours before or after 12 noon, you get to deduct t dollars from your bill. (This holds for any fraction of an hour as well.)
(a) Use blue ink to show Ralph's budget set. On this graph, the horizontal axis measures the time of day that he eats lunch, and the vertical axis measures the amount of money that he will have to spend on things other than lunch. Assume that he has 20 total to spend and that lunch at noon costs 10. (Hint: How much money would he have left if he ate at noon? at 1 P.M.? at 11 A.M.?)
(b) Recall that Ralph's preferred lunch time is 12 noon, but that he is willing to eat at another time if the food is sufficiently cheap. Draw some red indifference curves for Ralph that would be consistent with his choosing to eat at 11 A.M.
My question is, shouldnt the graph be perfectly parabolic? with both tangents at Time = 11 and 1. Shouldn't eating at 11 be exactly as preferable to eating at 1?
Thanks for the help.