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 is an illustration of:

Question

Quizplus · Accepted Answer

Gabriella's statement reflects optimal time allocation, where she equates the marginal utility of working with the marginal utility of leisure (going to the beach), indicating she is maximizing her utility given her constraints.

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