Question

Opportunity cost of your resource is defined as "the value associated with the next best use of that resource (which you must give up)." Decisions you make should reflect your opportunity cost, and not just your out-of-pocket costs. For example, if you decide to spend two hours of your time watching TV, the opportunity cost of your time is the value associated with its next best use (studying, sleeping, or another use).

When the I-395 Express Lanes first opened in November 2019, the toll was expected to reach up to $30 for drivers in the Northbound lanes to travel a distance of only 8 miles during the morning rush hour.

Using the principles of Opportunity Cost and Rational Decision Making, explain why (or why not) drivers might pay up to $30 to save 30 minutes of travel time during the rush hour.

Answer 1

People who value time over money are happier and more productive. In the modern lifestyle, the only thing that people can't control if the time. Everyone is busy with their hectic schedule and work so that they have no time to waste. Infact, many people wish for more than 24 hours in a day. So the people would not be reluctant to spent $30 to save 30 minutes of travel so that they can utilise that time for something more effective.

The automobile pollution is the worst kind of air pollution that the humanity is experiencing. It creates many respiratory disorders like Asthma, COPD, Lung cancer etc. So, less hours in traffic means less chances of pollution - Health is Wealth.

If we don't pay for a service, we always take it for granted. But when we pay for it not only the service but we also would feel a sense of dignity as if we have the right to travel through the road and one would feel obliged to keep the road clean and henceforth won't dump waste in the road. Therefore, it would help to evoke a sense of civic consciousness in the citizens.