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Posted by on Friday, September 25, 2009 at 12:19pm.

Points on the graph:

a) According to the PPF, Person A has ___ hours to allocate between work and leisure.

b) Between points C and E, the opportunity cost of earning an additional $10 income is ___.

c) Between points C and A, the opportunity cost of one hour leisure is ___ in forgone income.


a) 8 (I looked at point C and did the slope of the point...)

b) 0 (I think it's 0 because no opportunity lost over leisure??)

c) $10 (took the difference between the points--basically rise/run and got $10...)

Are my answers correct? If not, please correct them? Thanks.

  • Economics - PPF - , Friday, September 25, 2009 at 7:02pm

    Unfortunately, I am having trouble visualizing the graph. what are on each axis? Is the PPF on the graph drawn? Are you given a wage rate?

    b) is unlikely to be right as about everything we do has an opportunity cost, including giving up leisure time.

  • Economics - PPF - , Friday, September 25, 2009 at 7:15pm

    Wage rate is not given, hours (leisure) on x-axis, income (work) on y-axis

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