Sunday, March 22, 2020

Sketch Damian’s recreational consumption time constraint

Damian likes dividing his recreational time between going to movies and reading.  He has twenty hours a week available for recreation.  A movie takes two hours and reading takes one hour.  Damian also has a limited amount of inform to spend on recreation.  He has $60 a week to spend on recreations.  A movie costs $15 and magazines he likes to read cost $10 (he never reads the same magazine more than once).
a) Sketch Damian’s recreational consumption time constraint.  Be sure to clearly label the diagram.  What is the opportunity cost of reading a book in terms of time? 
b) Sketch Damian’s recreational consumption time constraint.  Be sure to clearly label the diagram.  What is the opportunity cost of reading a book in terms of income?
c) What is Damian’s opportunity set (or recreational possibility set given the two constraints)?
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