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Angela is planning a trip to Las Vegas. She can either fly into Las Vegas or drive a rental car. The air ticket costs $500.

Angela is planning a trip to Las Vegas. She can either fly into Las Vegas or drive a rental car. The air ticket costs $500. She can rent a car for $200 per week (cheaper than renting the car on a daily basis. So she plans to rent for a week even though she does not need the car after 6 days) and the trip takes exactly six days if she drives. She usually stays in Hilton whenever she travels and the expected cost is $100 per night (tax included). She would spend 4 nights in Las Vegas and two more nights on the way if she drives. Her food expenses would be $125 if she flies and $200 if she drives. The expected gas cost, if she drives, is $150. The opportunity cost of flying and driving options are:

Flying option

Driving option

A

($1,150)

$1,150

B

(1,025)

$1,025

C

($1,150)

($1,025)

D

$1,025

$1,150

E

$1,150

$1,025

a.

A

b.

B

c.

C

d.

D

e.

E

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