Chapter 5.4, Problem 3R

To determine

The two costs of operating a vehicle are based on state requirements.

Explanation of Solution

1. Registration fee: A registration fee also known as a licensing fee is paid to the state for the right to use a vehicle in a country. It is usually paid annually.
2. Liability insurance: Liability insurance is often considered as a state requirement that needs to be purchased before the vehicle is licensed. Liability insurance is insurance that pays for property damaged and when the owner of a vehicle is bodily injured.