Consider the time allocation budget line for Priya. Put hours of leisure on the horizontal axis and income on the vertical axis. If Priya can allocate 100 hours per week to either leisure or work and her wage per hour is $18, then the vertical intercept is _____ and the slope of the time allocation budget line is _____.
A) $180; 18
B) $1,800; 18
C) $1,800; -18
D) $720; 18

Question

Quizplus · Accepted Answer

The vertical intercept is the maximum income Priya can earn if she works all 100 hours, which is 100 hours * $18/hour = $1,800. The slope is the negative of the wage rate, -$18, as it represents the trade-off between leisure and income.

Consider the Time Allocation Budget Line for Priya