Question

Take a stab at this question (you’ll need to do some multiplication). Every day, 500,000 drivers in Los Angeles incur an additional 30 minutes of traffic delays when commuting by car to their jobs. In Boston, the delays amount to 45 minutes for 200,000 drivers. If the price of time is $15/hour in Los Angeles and $25/hour in Boston, which city incurs the largest opportunity cost?

Answer 1

Answer / Explanation

Numbers of drivers in Los Angeles that incur an additional 30 minutes of traffic delays = 500000

Neither of the cities

Hence,

L.A. = O.50 hrs. x 500,000 drivers at $15/hr implies a cost of $3,750,000 )  Boston = 0.75 hrs. x 200,000 drivers at $25/hr implies $3,750,000