ECO100Y1 Chapter Notes -Traffic Ticket, Sport Canada, Opportunity Cost
Document Summary
The economic way of thinking (marginal analysis and opportunity cost) You are planning a trip to ottawa, which is 400 miles. Except for the cost, you are completely indifferent between driving and taking the bus. You do not know how much it would cost to drive your car, so you call hertz for an estimate. The person you speak with tells you that for your make of car, the costs of a typical 10,000 mile driving year are as follows: A non-economist calculates that these costs sum to sh. 70/mile and uses this figure to compute that the 400 mile trip will cost by car. The non-economist concludes that you should take the bus, because it is cheaper. The calculation performed is not correct, as depending on. These costs are therefore irrelevant to the cost of driving your car to ottawa as they would have to pay in any route of action and therefore cancel out.