1. A Canadian firm has decided to build a 1000 mile oil pipeline in the US, spending $1B (B for billion) for goods and services provided by US residents (locals). Answers to the questions below help determine whether US residents gain by giving the Canadian firm permission to build. Assume in parts a and b that the pipeline would transport Canadian oil to US ports to be sent to Latin America and Europe. If the pipeline was not permitted, the oil would be shipped to Canadian refineries to produce fuel to be sold in Asia. The US economy has normal activity, with 4% unemployment and a 4% annual real (inflation adjusted) interest rate. Oil pipelines in the US spill on average 30 gallons of oil per mile per year. Pipeline owners compensate victims, but not fully. The uncompensated costs are estimated to average $200 per gallon spilled. a.[7] Estimate the locals' net generated income from construction of the pipeline. Show and explain all your steps. b.[7] Use your answer to part a and the given information about costs to estimate the locals' annual net benefit from the pipeline project. Show and explain all your steps. c.[7 extra credit] In this part, assume that if the pipeline were built, it would transport 0.8Mbd (million barrels per day) of Canadian oil to Texas refineries, which would make fuel from it to ship to Europe and Latin America. How would this be most likely to change the estimate of US residents' annual net benefit from the pipeline? Explain. If the answer depends on missing information, explain what the most relevant information is and how it could be used to answer what was asked