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 take the bus if saving half an hour is worth $0.50 or more.
C. Pat should drive because it saves half an hour relative to taking the bus.
D. Pat should drive if saving half an hour is worth $0.50 or more.
Answer: D
You might also like to view...
The proposition that if property rights are well defined and there are no transaction costs, an efficient allocation of resources will result even if externalities exist, is known as __________________
a. transaction costs b. Hartwick's rule c. the Coase Theorem d. Coase's Law e. the Hayes Theorem
When nations enter into currency unions, their fiscal affairs continue to be separate. The exception to this situation is whenever a confederation of states has a system:
A) whereby monetary policy is decided by consensus rather than centrally. B) of government subsidies for firms exporting outside the union. C) of fiscal mechanisms that permits interstate transfers. D) of common tax policies and regulatory rule.