Evaluation of fuel economy standard Fuel economy standards in the United States have been changing over the last decade for political reasons. In 2017, the federal government rolled back fuel economy standards set in 2016 for the years 2022-2025, freezing the standard at 41 mpg. A new proposal under review would increase the fuel economy to 48 mpg in 2025. In this problem, you will use payback calculations to evaluate the conditions under which the policy increasing the standard provides a net positive economic impact for consumers Research estimates that the typical vehicle will cost an additional $1,500 in order to increase the fuel economy from 41 mpg to 48 mpg with currently available technologies. Vehicles last for 15 years on average. Real-world driving conditions reduce the fuel economy compared to the test procedures by ~30%. For consumer payback assume the fuel economy of 29 mpg without a policy change and 34 mpg with a policy change. (A) Payback with current technology and prices: Assuming a gasoline price of $3.00/gallon and annual VMT of 12,000 miles/year, how long would it take a consumer to payback the investment in higher vehicle efficiency? (B) Payback with current technology and high gasoline prices: The original policy was developed during the 2007-2014 time period with significantly higher gas prices. Recalculate the payback in (a) using a $4.00/gallon gasoline price. Does this change your impression of the policy? (C) Payback with improved technology: Improvements in vehicle efficiency technology are expected to reduce the cost difference between the 41 mpg vehicle and the 49.7 mpg vehicle to $1,000. What is the payback with improved technology and current fuel prices ($3.00/gallon)? (D) Reflection: Provide a 3-4 sentence argument for either keeping the 41 mpg target for 2025 or enacting the new policy raising the target to 48. Please expand your discussion beyond payback time in your answer. What other considerations may be important in this decision?