Use the following to answer questions:
Figure: Joanna's Time Allocation Budget Line
-(Figure: Joanna's Time Allocation Budget Line) The figure Joanna's Time Allocation Budget Line depicts what happens when she can choose how to spend 40 hours. What is Joanna's wage rate?
A) $10.00
B) $12.50
C) $40.00
D) $15.00

Question

Use the following to answer questions:
Figure: Joanna's Time Allocation Budget Line 
-(Figure: Joanna's Time Allocation Budget Line) The figure Joanna's Time Allocation Budget Line depicts what happens when she can choose how to spend 40 hours. What is Joanna's wage rate?
A) $10.00 
B) $12.50 
C) $40.00 
D) $15.00

Quizplus · Accepted Answer

The wage rate is determined by the slope of the budget line. If the budget line shows that Joanna can earn $500 by working all 40 hours, then her wage rate is $500/40 = $12.50 per hour.

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