# Thread: Microeconomics question

1. ## Microeconomics question

Hi there,

I want to know how I would set up this problem. I've been thrown into a Microeconomics class and it's been years since I've had any experience with opportunity cost equations. Could I possibly get some help with how to work this?

Suppose there are two ways of traveling from Boston to DC. The Megabus costs $25 each way and takes 4 and 1/2 hours. The Amtrak costs$100 and takes three hours. Different travelers may value their time differently (for instance, one traveler may value his time at $100 per hour, and another at$20 per hour). What time valuation (per hour) would make a traveler indifferent to the two bus options?

suppose my opportunity cost of time wasted is $x per hour. The cost of the megabus ticket is: Direct cost: 25 Opportunity cost: 4.5x Total cost: 25 + 4.5x do the same thing for the other ticket, then find the value of x that makes the total cost of both options equal. PS: i assume he is travelling one way. although if you work it through im pretty sure that wont affect the final answer. 3. ## Re: Microeconomics question Originally Posted by SpringFan25 suppose my opportunity cost of time wasted is$x per hour.

The cost of the megabus ticket is:
Direct cost: 25
Opportunity cost: 4.5x
Total cost: 25 + 4.5x

do the same thing for the other ticket, then find the value of x that makes the total cost of both options equal.

PS: i assume he is travelling one way. although if you work it through im pretty sure that wont affect the final answer.
Yay! Thank you! I never would have thought of that. So I just set 25 + 4.5x equal to 100 + 3x to get x = 50?