Suppose you have midterms in economics and astronomy tomorrow. You only have 4 hours to study. The table below provides the combinations of time spent studying economics and astronomy and your expected scores.
Hours Studying Econ
|Score||Hours Studying Astronomy||Score|
a. Draw a PPF. What is the opportunity cost, in terms of your grades, of studying one extra hour of econ or one extra hour of astronomy?
b. If your goal is to maximize your combined scores, how many hours should you spend in each subject?
c. Your laptop dies. All your notes are on your hard drive. How does your PPF change? Illustrate on your graph from part (a)
A. The PPF is drawn below.
The opportunity cost of studying one extra hour of economics is the marks lost in astronomy for studying one less hours there, and vice versa.
B. We should spend 3 hours in economics and 1 hour in astronomy as this combination gives us total marks of 178, which is maximum combination. This is shown below
0 econ, 4 astro=60+92=152
1 econ, 3 astro=80+90=170
2 econ, 2 astro=90+87=177
3 econ, 1 astro=95+83=178
4 econ, 0 astro=98+70=168
C. In this case, we will spend 0 time on both subjects and hence will get 60 marks in economics and 70 in astronomy. So our PPF is now a single point, shown as the circle on origin of the PPF graph in part A.
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