Pat can either drive to work, which takes half an hour and uses $1.50 worth of gas, or take the bus, which takes an hour and costs $1.00. How should Pat get to work?
A)Pat should take the bus because it costs $0.50 less than driving.
B)Pat should drive because it saves half an hour relative to taking the bus.
C)Pat should drive if saving half an hour is worth $0.50 or more.
D)Pat should take the bus if saving half an hour is worth $0.50 or more.

Question

Quizplus · Accepted Answer

Applying the Cost-Benefit Principle, Pat should drive if the marginal benefit of driving (saving half an hour)is greater than its marginal cost ($0.50).

Pat Can Either Drive to Work, Which Takes Half an Hour