For each question, please clearly (i) identify the main concepts (ii) discuss and explain the theories (iii) give the evidence/graph/equation/ equality. 3. Suppose a proposed new road to be constructed in between New City and Old City will lower the average cost per trip by car from $5 to $4. Currently, 500,000 trips are made between the two cities per year. An estimate indicates that, all other things being equal, the new road will increase the number of trips per year to 600,000. Calculate the annual benefits to motorists of the new road as based on their willingness to pay.? 4. Two alternative programs to enhance the life and independency of 5,000 pensioners per year entail providing series of trainings and new health care center. The price of a new health care unit is $100,000, and the price of providing series of training is $20,000. One combination of the two programs that can enhance the 250 pensioners' life and independency is two units of health centers and three series of trainings. If two units of health care built, the marginal product of this program will be 15 pensioners can be independent per year. If three series of training programs, the marginal product of this program will be 10 enhanced the pensioners' life and independency per year. Is the mix involving two units of health care and three series of trainings cost effective? Assuming that the marginal products of both programs decline, what needs to be done to achieve the cost- effective mix of programs? 5. List alternatives to taxation as a means of financing government expenditures. Give an example for each alternative. 6. The payroll tax for unemployment insurance in a certain nation taxes all wages up to a maximum per worker of $30,000 at a 5 percent flat rate. What are the marginal and average tax rates on the wages for each of the following three workers? a. A restaurant worker with annual wages of $18,000. b. An assistant bank manager with wages of $35,000 per year. c. A corporate CEO with an annual salary of $500,000. 7. Suppose the efficiency-loss ratio of taxes on capital income is 20 percent. The capital income taxes currently collect $60 billion of revenue per year. What would be the gain in well-being if a lump-sum tax replaced the current taxes on capital income? 8. Show how a soft drink tax of 20 cents per liter collected from sellers affects the market equilibrium for soft drink. Assume that the demand curve for soft drink is downward sloping and that the supply curve is upward sloping. a. Show the excess burden of the tax on your diagram. b. What is the incidence of the tax between buyers and sellers? c. How would your answer be affected if the tax were collected from buyers instead of sellers