You have probably noticed that the price of gasoline has fallen a little lately. In January, the national average retail price of gasoline in the US fell to $2.20, as low as it's been in 15 years. I filled my car at Costco a few weeks ago for just $1.92 a gallon.
But how much does it really cost to fuel your car? Or, as an economist would put it, what is the opportunity cost of buying motor fuel? I would argue that the proper measure of opportunity cost in this case is the number of hours your have to work to buy the gasoline you need to drive your car 100 miles. That turns out to be lower now than it has ever been in the history of the automobile. Let's take a little tour through the ages to see just how cheap gasoline is today.