A Variable Toll on a Road in Washington Reached a High

question 300

Multiple Choice

A variable toll on a road in Washington reached a high during the evening rush hour of $5.75. This toll bought the drivers who paid it a 27 minute time savings. Which of the following is correct?

• A)For some consumers, the toll was less than the opportunity cost of the time they would have spent in traffic.
• B)For some consumers, the toll was more than the opportunity cost of the time they would have spent in traffic.
• C)No consumers would find this toll worth the time saved in traffic.
• D)Both a and b are correct.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold, before deducting overheads, salaries, and other operating expenses.

Net Income

After deducting taxes and expenses from its revenues, the resultant profit of a company.