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asked in Estimation by (32 points) | 149 views

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Ask clarifying questions:

1. Do we consider both private and commercial (large vehicle - trucks) vehicle for assessment? - say the answer is only private vehcile

2. Even with in private vehicle, do we have to consider people driving the car for personal use or people driving for Uber and Lyft. The consumption of gas will vary based on the usage - say the answer is vehicle for personal use only

Make equation:

Money spent per year on Gas = total gas consumption by private vehicle in a year * price of gas per gallon

Total gas consumption by private vehicle per year = number of private vehicles in US * (average gas consumption per month per vehicle * 12)

Number of private vehicle in US = number of households in US * average cars per household

Number of household in US = total US population/ average person per household

Assumptions and Facts:

1.   Gas price = $3 per gallon

2.  Average person per household = 3

3.  Average car per household = 1.5

4.  Average gas consumption per vehicle per year =  1200 gallon

5. US population = 300 million

Do the Math

Number of household in US = total US population/ average person per household

                                             = 300 million / 3

                                             = 100 million households

Number of private vehicle in US = number of households in US * average cars per household

                                                   =  100 million * 1.5 cars per household

                                                   = 150 million cars in US

Total gas consumption by private vehicle per year = number of private vehicles in US * (average gas consumption per month per vehicle * 12)

                                                                                 = 150 million cars * (100 gallon per month * 12)

                                                                                 = 150 million * 1200 gallon

                                                                                 =  180 billion gallon

Money spent per year on Gas = total gas consumption by private vehicle in a year * price of gas per gallon

                                                =  180 billion gallon * $3 per gallon 

                                                 = $540 billion

answered by (49 points)

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