You are thinking about traveling to visit friends in Portland. You can fly or take the bus. A ROUND-TRIP plane ticket costs $300, and it takes three hours to get from your house to your friend's house if you fly. A ROUND-TRIP bus ticket costs $150 and it takes 10 hours to get door-to-door using the bus.What is the minimum value of your time necessary to induce you to buy the plane ticket instead of taking the bus?

Question

What will be an ideal response?

Answer 1

$10.71/hour

Feedback
Note that the total travel time will be twice the length of a plane flight or bus trip because you have to go to Portland AND back home. Keeping that in mind, you want to figure out how much time you will save with the plane and how much money you'll save with the bus.By air, the cost of traveling round-trip in terms of money and the value of lost time is: $300 + 6 hours times $X dollars.
By bus, the cost of traveling round-trip is: $150 plus 20 hours times $X dollars.
$X is the value of lost time or earnings. Set these two equations equal to each other, and that will show when a person is indifferent between flying and taking a bus.
$300 + 6 x $X = $150 + 20 x $X
$X = $150/14 = $10.71