Arelocation of a short stretch of rural highway feeding into route 390 northwest of dallas is to be made to accommodate new growth. the existing road is now unsafe, and improving it is not an alternative. alternate new route locations are designated as east and west. the initial investment by government highway agencies will be $3,600,000 for east and $5,250,000 for west. annual highway maintenance costs will be $120,000 for east and $90,000 for the shorter location west. relevant annual road user costs, considering vehicle operation, time en route, fuel, safety, mileage, and so on, are estimated as $880,000 for east and only $740,000 for west. assume a 20-year service life and i = 7 percent. a. clearly identify the annual equivalent benefits and costs of route west over route east. b. compute the appropriate b/c ratio(s) and decide whether east or west should be constructed.

Consider the market for gas-powered small cars. assume gas-powered small cars are a normal good. for each of the following events, identify which of the determinants of demand or supply are affected. if demand is unaffected by this event because it creates only a supply change, select the “none” option under the “demand determinant” column. similarly, if supply is unaffected by this event because it creates only a demand change, select the “none” option under the “supply determinant” column. event demand determinant supply determinant people decide to have more children. the price of electric small cars falls. the discovery of a new source of iron ore lowers steel prices. an economic recession lowers people’s wealth. a number of major car dealers decide to switch from selling gas-powered cars to selling electric cars. show the effect of the following event on the market for gas-powered small cars: people decide to have more children for each of the four independent situations, prepare the journal entries to record the exchange on the books of each company.