Ms Liebowitz Has a Choice of Driving or Flying from Morgantown

question 50

Multiple Choice

Ms. Liebowitz has a choice of driving or flying from Morgantown, West Virginia to Washington, D.C. for a one-day business trip. If she travels by air, she will be able to work seven hours in D.C., while if she drives, she will only have time to work four hours once there. Her expected income from each hour of work in D.C. is $40. If Ms. Liebowitz is a rational decision maker, she will chose to fly if and only if the price differential (air cost minus driving cost) is less than

• A) $40.
• B) $120.
• C) $160.
• D) $280.

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