Javon has 80 hours per week to allocate between labour and leisure.Graph hours of leisure per week on the horizontal axis and income per week on the vertical axis.If Javon's hourly wage is $8,then the vertical intercept of his time allocation budget line is:
A) $8.
B) $640.
C) 40 hours.
D) 80 hours.

Question

Quizplus · Accepted Answer

The time allocation budget line shows the various combinations of leisure and labour Javon can choose based on his 80 hours per week and $640 weekly income ($8 per hour x 80 hours).

The vertical intercept of the budget line represents the amount of income that Javon would earn if he chose to allocate all 80 hours to labour and no hours to leisure. In this case, his income would be:

$8 per hour x 80 hours = $640

Therefore, the correct answer is B, $640.

Javon Has 80 Hours Per Week to Allocate Between Labour