Economics for your Classroom from Ed Dolan’s Econ Blog By One Measure, the Cost of Driving is Now Lower than Ever Before Dec. 29, 2014 Terms of Use: These slides are provided under Creative Commons License Attribution—Share Alike 3.0 . You are free to use these slides as a resource for your economics classes together with whatever textbook you are using. If you like the slides, you may also want to take a look at my textbook, Introduction to Economics , from BVT Publishing.
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Economics for your Classroom from Ed Dolan’s Econ Blog By One Measure, the Cost of Driving is Now Lower than Ever Before Dec. 29, 2014 Ed Dolan’s Econ.
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Economics for your Classroom fromEd Dolan’s Econ Blog
By One Measure,the Cost of Driving is
Now Lower than Ever BeforeDec. 29, 2014
Terms of Use: These slides are provided under Creative Commons License Attribution—Share Alike 3.0 . You are free to use these slides as a resource for your economics classes together with whatever textbook you are using. If you like the slides, you may also want to take a look at my textbook, Introduction to Economics, from BVT Publishing.
The opportunity cost of driving, measured in minutes worked per mile, depends on three things: Your wage, in dollars per hour The price of gasoline in dollars
per gallon The efficiency of your car in miles
per gallon
Dec. 29, 2014 Ed Dolan’s Econ Blog
Example: You earn $18 per hour Gas costs $3.00 per gallonAn hour’s wage buys 6 gallons of gas, or 10 minutes of work per gallon Your car gets 25 miles per gallonTen minutes work gets you 25 miles, which means the opportunity cost of driving is 0.4 minutes (24 seconds) worked per mile
This chart shows the entire 100-year trend, based on the average wage of production and nonsupervisory workers and the US average gasoline price
The red points and trend line are based on selected popular Ford models
The blue line is based on the average fuel economy of all cars on the road, both old and new
The bottom line: If you drive Ford’s most efficient gasoline model (excluding electrics and hybrids), the opportunity cost of driving is at an all time low