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?

• A. 1 percentage point
• B. 1.5 percentage points
• C. 2 percentage points
• D. 3 percentage points
• E. 5 percentage points

Answer: (B)

Verified step by step guidance

1. 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.
2. 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.
3. 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.
4. Understand that the marginal cost represents the opportunity cost of increasing binge drinking by one additional hour, which is the loss in grade points.
5. 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.