The state of New York received $3 billion (from federal sources and a state petroleum tax) to be spent on highways and/or mass transit (subways, buses, and urban rail lines), both of which could be used to meet the transportation needs of the state's population.
a. If each mile of mass transit costs $20 million, what is the maximum number of miles of mass transit that these funds would have enabled the state to construct?
b. If each mile of highway costs $10 million, what is the maximum number of miles of highways that these funds would have enabled the state to construct?
c. If the number of miles of mass transit constructed is put on the vertical axis of a graph and the number of miles of highways constructed is put on the horizontal axis, can a bud get line (showing the maximum number of miles of mass transit that can be constructed, given each number of miles of highways constructed) be drawn for the state? If so, what is the slope of this bud get line? (Assume that the $3 billion is the only source of funds for mass transit or highway construction.)
d. If the public and the state government agree that every extra mile of mass transit adds three times as much to the state's transportation capability as an extra mile of highways, how much of the $3 billion should be spent on mass transit if the objective is to maximize transportation capability?