Question: Edwin enjoys doing two things: reading books about economics and watching the Hanshin Tigers play baseball. Assume that economics books cost ¥4,000 and that tickets to see the Tigers play cost ¥3,000 each. Edwin has an income of ¥120,000.

a. Draw Edwin’s constraint. Assuming that Edwin has standard-looking indifference curves, draw of few these as well, including the highest possible indifference curve. Label the best possible combination of books and games “e”.

b. The Tigers offer a season ticket that allows a fan to see all 65 home games for only ¥100,000.

i. Show what Edwin’s constraint looks like if he buys the season ticket.

ii. Does Edwin buy the ticket? (Hint: There is no one correct answer to this question. To solve, add indifference curves to the new constraint and look for the best possible combination. How does this point compare with the best possible point if the constraint looks the way it did in (a)?