Figure19-12The Time Allocation Budget Line Clive’s time allocation budget line shows his trade- off between work, which pays a wage rate of $10 per hour, and leisure. At point X he allocates all his time, 80 hours, to leisure but has no income. At point Y he allocates all his time to work, earning $800, but consumes no leisure. His hourly wage rate of $10, the opportunity cost of an hour of leisure, is equal to minus the slope of the time allocation budget line. We have assumed that point A, at 40 hours of leisure and $400 in income, is Clive’s optimal time allocation choice. It obeys the optimal time allocation rule: the additional utility Clive gets from one more hour of leisure must equal the additional utility he gets from the goods he can purchase with one hour’s wages.