Help! with graphs & calculations.

JohnM

TS Contributor
#7
Michelle,

The general strategy with these kinds of problems is to first determine the graphical boundaries, then plot the y vs x relationships.

The budget or boundary (or constraint) would be "y + x = total amount of money available in the budget" where, as y increases (contributions), x decreases (money left over to buy food, etc.), and vice versa.

Then plot the function(s) that describe y = mx + b where x is the amount of money contributed, m is the matching rate + contribution, b would be any "flat" contributions, and then y would be the total return.

These functions are piece-wise and will have "kinks" in them where the matching rate changes.

(See attached graph image for a rough example).

Sorry this is kind of general, but my background in economics is pretty much non-existent.

John