Essay, Macro & Micro economics

Project description 1. Transportation Costs How much does it cost to travel from Boston to: a. Salem, MA b. Concord, NH c. NYC d. Washington, DC e. Miami, FL f. London, England g. Dubai h. Singapore i. Easter Island j. Churchill, MB In each case indicate the cost per mile, and the cheapest mode of transport. Include in the cost the value of time, at $15/hour. Note: This may require some digging, even imagination! Perhaps you would make a good travel agent. Now graph the distance from Boston on the horizontal axis and the cost per mile on the vertical axis. Is there a relationship between the two?2. Road Tolls Economists tend to favor peak load pricing. That helps explain why cell phone calls cost more during working hours (the peak) than in the evenings or on weekends (the trough). The same principle could be applied to roads such as the Mass Pike. (a) Suggest a pattern of tolls for the Mass Pike that would reflect peak load pricing? Justify your choice of tolls. (b) It has been suggested that the Mass Pike should raise tolls, in order to relieve the burden on the state of paying for the costs of the Big Dig (which added a third tunnel under Boston Harbor, and put the central artery underground). a. Is this appropriate? Justify your answer. b. If you were designing tolls to cover the cost of the Big Dig, where would you levy them and how much would you charge? Justify your answer. This question will require some thought and may call for some research. We will discuss it further in class.3. Auto Insurance Not all drivers buy auto insurance, although they are supposed to do so. Some have suggested that the Massachusetts should provide basic auto insurance coverage, at least covering bodily harm, and should pay for it by adding a fee to every gallon of motor fuel sold in the state. Would you favor such a policy? Explain why or why not. Attention, Please note that you are not supposed to upload any files with additional pages (extra instructions) until Administration informs you on the payment receipt.