Air travel from New York to Los Angeles costs $800 and takes 4 hours. A bus ticket between the cities costs $100 and takes 104 hours. Other things constant, the minimum value of one's time that would induce a rational individual to fly rather than drive would be: (A)

A. just over $7 per hour

B. anything greater than $0 per hour

C just over $700 per hour.

D. just over $100 per hour

E. just over $10 per hour

Question

Business

Susan Mcconnell

19 March, 10:18

Air travel from New York to Los Angeles costs $800 and takes 4 hours. A bus ticket between the cities costs $100 and takes 104 hours. Other things constant, the minimum value of one's time that would induce a rational individual to fly rather than drive would be: (A)

A. just over $7 per hour

B. anything greater than $0 per hour

C just over $700 per hour.

D. just over $100 per hour

E. just over $10 per hour

+3

Answers (1)

Know the Answer?

Fresier · Answer 1

A. just over $7 per hour.

Explanation:

$800 / 104 hours = $7.69

when a rational individual chooses to fly over driving would be because of valuing time and the minimum value per hour is $7.69.

Flying is valuing time on its own and maximum value per hour is $800/4 = $200 per hour.