Exhibit 1-1
-Refer to Exhibit 1-1.Suppose that Jack has three hours to study for an exam in economics and another exam in math 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 one hour to two hours is
A)85 points on the math grade.
B)55 points on the math grade.
C)30 points on the math grade.
D)20 points on the math grade.
E)zero.

Question

Exhibit 1-1 
-Refer to Exhibit 1-1.Suppose that Jack has three hours to study for an exam in economics and another exam in math 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 one hour to two hours is
A)85 points on the math grade. 
B)55 points on the math grade. 
C)30 points on the math grade. 
D)20 points on the math grade. 
E)zero.

Quizplus · Accepted Answer

The opportunity cost of increasing the time spent on studying economics from one hour to two hours is the change in math grade divided by the change in economics grade. In this case, the change in math grade is 20 points (70 - 50) and the change in economics grade is 0.67 (83 - 82.33). Therefore, the opportunity cost is 20/0.67 = 29.85, which is closest to 30. Therefore, the best choice is to spend one hour on economics and two hours on math.

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