How would you prefer to get to work

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Reference no: EM131923471

Problem

You can either take a bus or drive your car to get to work. A bus pass costs $5 per week, and the weekly costs associated with driving the car to work are $60 (including parking, gas, etc.). You spend half an hour less on a one-way trip if you drive the car than if you take the bus. Suppose your wage rate were $10 per hour, how would you prefer to get to work? Will you change your preferred mode of transportation if your wage rate rises to $20 per hour? Assume you work 5 days a week and that the time spent riding on a bus or driving a car does not enter your utility directly.

Reference no: EM131923471

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