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0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

2. Introductory Economic Models

PPF - Increasing Marginal Opportunity Costs and Allocative Efficiency

Microeconomics

2. Introductory Economic Models

PPF - Increasing Marginal Opportunity Costs and Allocative Efficiency

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Multiple Choice

Chuggy wants to earn a high grade in his microeconomics class, but also loves going to parties and binge drinking. The first graph illustrates Chuggy's PPF. The second graph denotes his MB curve from binge drinking.

What is Chuggy's marginal cost of binge drinking if he parties for three hours a week?

1 percentage point

1.5 percentage points

2 percentage points

3 percentage points

5 percentage points

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Verified step by step guidance

Identify the point on Chuggy's PPF graph where binge drinking is 3 hours per week. This corresponds to an economics grade of 85 percent.

Determine the change in the economics grade when binge drinking increases from 3 to 4 hours per week. On the PPF graph, this change is from 85 percent to 82 percent.

Calculate the marginal cost of binge drinking in terms of grade points lost. The marginal cost is the change in grade points, which is 85 - 82 = 3 percentage points.

Understand that the marginal cost represents the opportunity cost of increasing binge drinking by one additional hour, which is the loss in grade points.

Compare the calculated marginal cost with the given options to identify the correct answer. The marginal cost of 3 percentage points matches one of the provided options.