Exhibit 1-1

-Refer to Exhibit 1-1. Suppose that Adam has three hours to study for an exam in economics and another exam in sociology on the same day. The amount of time he spends studying economics and its relation to his grade in the two classes are shown in the table. The opportunity cost of increasing the time spent on studying economics from two hour to three hours is
A)55 points on the sociology grade.
B)40 points on the sociology grade.
C)15 points on the sociology grade.
D)10 points on the sociology grade.
E)zero.

Question

Exhibit 1-1
 
-Refer to Exhibit 1-1. Suppose that Adam has three hours to study for an exam in economics and another exam in sociology on the same day. The amount of time he spends studying economics and its relation to his grade in the two classes are shown in the table. The opportunity cost of increasing the time spent on studying economics from two hour to three hours is
A)55 points on the sociology grade. 
B)40 points on the sociology grade. 
C)15 points on the sociology grade. 
D)10 points on the sociology grade. 
E)zero.

Quizplus · Accepted Answer

The opportunity cost of increasing the time spent on studying economics from two hour to three hours is the loss of points in the sociology grade. From the table, we can see that if Adam spends 2 hours on studying economics and 1 hour on sociology, he will get 80 points on the economics exam and 85 points on the sociology exam. If he spends 3 hours on economics, he will get 90 points on the economics exam but only 45 points on the sociology exam. Therefore, the opportunity cost of increasing the time spent on studying economics from 2 hours to 3 hours is the difference in the sociology grade, which is 40 points (85-45).

Exhibit 1-1 -Refer to Exhibit 1-1. Suppose That Adam Has Three Hours