The average price of gasoline in your neighborhood is $2.15 per gallon.Your neighbor, Diana tells you that you can "save a lot" by frequenting a gas station 20 miles outside your neighborhood where the price of gasoline is $2.06 per gallon However, she cautions you that there are usually long lines at that station.Is her suggestion beneficial to you?
A)Yes, since gasoline is a necessity for car owners, the total cost savings would be relatively substantial.
B)No, if one factors in the non-monetary opportunity costs (driving time and waiting in line), it could prove more costly to go to the lower-priced gasoline station.
C)Yes, the lower price of gasoline at the rival station increases my purchasing power and enables me to consume more of other goods.
D)No, my friend is misled; clearly, the lower-priced gasoline must be of inferior quality and could damage vehicles.

Question

Quizplus · Accepted Answer

While the lower price per gallon of gasoline may seem enticing, the additional costs of driving 20 miles out of the way and waiting in long lines could outweigh the cost savings. Additionally, the value of the time spent waiting in line could be better spent on other activities. Therefore, it may not be beneficial to go to the cheaper gas station.

The Average Price of Gasoline in Your Neighborhood Is $2