You are trying to decide whether to fly or drive from Rochester to Boston during your summer visit. The trip is approximately 400 miles. You can purchase a round-trip nonstop flight for $230. The duration of each flight is 3.5 hours (seven hours in total). If you drive, it will take you approximately seven hours each way (14 hours in total). Your car gets 32 miles to the gallon and you expect gas will cost $3/gal. Tolls are $15 each way. You value your time at $15 per hour.
a. Calculate the total cost of driving to Boston and back.
b. Under these conditions, will you drive or fly?
c. What if you value your time at $20, rather than $15, per hour?
d. You are offered a deal for $180 total airfare if you take a flight with a one hour layover in NYC (total flying time does not change). Do you take the deal? Will this change your flying versus driving decision? (Use the $15 per hour value of time in the calculation.)
e. What are some other costs you may want to consider in this analysis?
f. If you were expecting a snow storm, how might this change your analysis? What are some other costs you may want to take into consideration?