Names of Students in Group:___________________________________ 1 __________________________________________________________________________ HNRS 228 Section 002 Energy and the Environment Laboratory Exercise #8 – Cost Effectiveness of Fuel Efficiency In an August 21, 2001 Lincoln Journal-Star article entitled "Forcing Fuel Efficiency on Consumers Doesn't Work", author Jerry Taylor reported the following assertions: I. "Economists have discovered over the long run, a 20 percent increase in gasoline costs, for instance, will result in a 20 percent decline in gasoline consumption.” II. "A recent report from the National Academy of Sciences, for instance, notes that the fuel efficiency of a large pickup could be increased from 18.1 miles per gallon to 26.7 miles per gallon at a cost to automakers of $1,466." III. "It would take the typical driver 14 years before he would save enough in gasoline costs to pay for the mandated up-front expenditure [$1,466]." IV. "A similar calculation for getting a large SUV up to 25.1 miles per gallon leads to a $1,348 expenditure and, similarly, more than a decade before buyers would break even." V. "You could take that $1,466, for instance, put it in a checking account yielding 5 percent interest, and make a heck of a lot more money than you could by investing it in automobile fuel efficiency." After reading the article (see attachment), answer the following question sets.Names of Students in Group:___________________________________ 2 __________________________________________________________________________ 1. Answer the following: a. Which of the assertions can be checked without considerable research? __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ b. What assumptions would need to be made in checking assertion III? __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Names of Students in Group:___________________________________ 3 __________________________________________________________________________ c. What assumptions would need to be made in checking assertion IV? __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ d. What assumptions would need to be made in checking assertion V? __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Names of Students in Group:___________________________________ 4 __________________________________________________________________________ 2. Answer the following: a. Is the assertion III above reasonable? Explain why or why not. __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ b. What would be the effect of increased costs of gasoline on assertion III? __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Names of Students in Group:___________________________________ 5 __________________________________________________________________________ c. What would be the effect of increased miles driven per year on assertion III?