The more you want of something, the more you have to give up to get it. Economics dishing out those hard truths!
Concept #1: Increasing Marginal Opportunity Costs
Concept #2: Allocative Efficiency with Marginal Analysis
Practice: 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?
Practice: If Chuggy achieves allocative efficiency, how many hours does he spend binge drinking per week?
Practice: What is Chuggy’s economics grade when he achieves allocative efficiency?