Gabriella often faces a trade-off between time at the beach and time working as a model.She earns $40 per hour as a model and values going to the beach at the same price.When explaining this to her parents,she says,"The marginal utility per hour working is the same as the marginal utility per hour of going to the beach." This example illustrates:

Question

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The statement that the marginal utility per hour working is the same as the marginal utility per hour of going to the beach implies that Gabriella is allocating her time between the two activities in a way that maximizes her overall satisfaction. This is an example of optimal time allocation, as she is choosing the combination of beach time and modeling work that gives her the highest total utility.

Gabriella Often Faces a Trade-Off Between Time at the Beach