Task 1: Concept of road pricing is introduced by Arthur. C. Pigou in 1920. However, it took a long time until it was applied in a city. Do a research on the road pricing, its application, its benefits...

Task 1: Concept of road pricing is introduced by Arthur. C. Pigou in 1920. However, it took a long time until it was applied in a city. Do a research on the road pricing, its application, its benefits and disadvantages defined by both academic and regulators. Write your findings in no more than 1500 words. Task 2: In this task you are required to discuss about pricing, its concept and options of pricing available in this example. Make sure to address the following questions:  What price Mr. Smith is willing to pay for a new toll road in order to reduce the time he spends in congestion? Assume he is paid $40 per hour.  Compare his willingness to pay with a person with $20 per hour salary rates.  As a consultant to the government, what pricing scheme would you suggest for the toll road considering the Social Welfare of people? Consider all types of road users. Task 3: Would you suggest application of fuel tax as a substitute for Electronic Road Pricing? Compare their impact on road usage. Provide one practical example of using fuel tax as a strategy. Mr Smith lives in the eastern side of the city. He has to drive every day to travel to his work located in western side of the city. The river sets apart the two regions and there is a bridge over the river as the main shortest connecting road. Other substitute roads may have longer trip times as they pass through the CBD. Every day Mr Smith has to spend extra 20 minutes in congestion, 20 precious minutes that he could spend with his family rather than in congestion. He can consider this time and leave home early to get to work on time. But sometimes like today an accident makes the congestion worse. He may miss his meeting at 9:00 am. Recently, the government has announced of considering building a new bridge over the river to transfer some of the congestion to the second road. However, this plan has been opposed by environmental groups. They believe that building a new road would affect the wildlife of the river, makes more noise and air pollution and would not solve the congestion problem in long term. Some opponents advocate the use of Electronic Road Pricing (ERP). Under this system, drivers who use the bridge have to pay a toll. Their argument is that by applying road pricing, some of the drivers would be encouraged to use the other roads, or even public transport. This will decrease the congestion in the bridge. 2 | P a g e Task 4: In the example, two solutions of building a new road and using of ERP have been suggested. You suggest a third solution, and then discuss about pros and cons of all three options. Task 5: Assume that the government has come up with the cash flow information for the project of building a new road as shown in the table below. With the inflation rate of 5% and using NPV method find out whether the project is worthwhile or not. Calculation of Discount factor and present value for each year is essential. Year Cash Flow 0 -1,000, XXXXXXXXXX,000, XXXXXXXXXX,000, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX,541