g Chelsea can either take a bus or drive to work. A bus pass costs $30 per week, whereas driving costs $70 per week (parking, tolls, gas, etc). A one-way trip to work lasts 24 minutes longer by bus than by car. She works 5 days a week and neither time spent driving nor riding the bus enters her utility directly. Will Chelsea take the bus or drive if her wage rate is $7

If Chelsea takes the bus then it will take 24 minutes longer to reach the work. And since Chelsea works 5 days a week total extra minutes that will be spent while riding bus to work will be equal to

= 24 * 5

= 120 minutes

And 120 minutes is equivalent to = 120/60 = 2 hours.

So in terms of money, taking the wage rate of $7 total money that will be spent not working while taking the bus will be equal to

= Wage rate * Hours spent not working while taking the bus

= $7 * 2

= $14

So, total amount spent not working while taking the bus to work is equal to $14 per week.

And there is also a direct cost for taking the bus is equal to $30 per week.

So total cost associated by taking the bus = Cost of not working while taking the bus + Direct cost for taking the bus

= $14 + $30

= $44

So, total cost associated with taking the bus is equal to $44 per week while the cost for driving car to work is equal to $70 per week.

So, as you can see taking bus to work cost $44 week while taking car to work $70. Now we can clearly see that taking bus to work cost ($70 - $44) = $26.

So, Chelsea must take the bus to work since the cost of taking bus $26 less than the cost of taking car to work.

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