Effect of bus fare on the demand for auto travel

Assignment Help Microeconomics
Reference no: EM13127964

Question 1  (Demand Elasticity )

Commuters in a medium-sized city can travel either by automobile or by bus. The demand for automobile travel has been estimated to be

981_Q_1.png All exponents are constant elasticities (direct or cross).

where:

Q     =   automobile trips per hour (peak-hour)

a     =   constant

A     =   travel time by automobile (in minutes)

B     =   travel time by bus (in minutes)

C     =   average cost by automobile (in cents)

D     =   average cost by bus (fare, in cents)

 

(a)      The exponent of D in the above equation is +0.75.  What does this say about the effect of bus fare on the demand for auto travel?

(b)      Is the demand for auto with respect to auto travel-time elastic or inelastic?  Please explain.

(c)       Because of the congestion that is likely to occur on this corridor, the travel time by automobile would increase by 20%, and travel time by bus would increase by 10%.  At the same time, auto travel costs are expected to increase by 5% and bus costs (fare) would be decreased by 15%.  Based on the equation above, what will the percent change in auto travel be?

Question 2 (Congestion Pricing )

Please explain (if possible with diagrams) how is the introduction of a high-occupancy lane (HOV) on a highway equivalent to congestion pricing (e.g., charging monetary toll) in order to bring efficiency (system optimality) in peak traffic flows.

 

Question 3  (UTP - Trip Distribution)

A four-zone study area has the trip productions (origins) and zonal attractiveness shown in the Table 1.   The inter-zonal and intra-zonal friction factors are as given in Table 2.

1823_table_1.jpg

1752_table_2.jpg

Determine all zonal interchange volumes (Tij), using the gravity model.

 

Question 4. (Mode Choice)

A city commuter population has the following modal utility function, Uk = Ak - 0.003C - 0.04T

 

Where        Ak   constant for mode k

                 C    out-of-pocket travel cost in cents.

                 T    riding time in minutes

(a)    Apply the logit model to calculate the market shares of the two travel modes used in the city.

 

                           Mode                        Ak                     C                      T

                           Automobile               -0.20                240                  25

                           Regular city bus        -0.60                  80                  55

 

(b)   Suppose, in addition to the regular city bus, a private company starts its bus service along the same routes as the city bus with the following characteristics:

                           Mode                        Ak                     C                      T

                           Private bus                -0.60                  80                  55

 

            Determine the new market shares of auto, city bus and private bus.

 

Question 5 (10 points) (All-or-nothing / incremental assignment)

For the network shown below, 4 units of flow go from node 1 to node 3.  The average travel time functions on these links are:

ta = 3 + Xa2

tb = 1 + 3Xb

tc = 2 + Xc

(a)    Assign the 4 units of flow from node 1 to node 3 using incremental ( i.e., one unit at a time) capacitated ALL-OR-NOTHING assignment technique.  Show your work step by step as well as the final link flows  (Xa , Xb , Xc ).

(b)   Are the resulting flows in system optimum or user equilibrium?  Please explain.

Question 6 (User-Equilibrium vs. System Optimum Traffic Assignment)

 

For the network shown below, the following origin-destination volumes are the only volumes to be assigned to the network:VAC = 800               VBC = 100      VBD = 900

The link travel time (average travel time) functions are as follows (all times are in minutes): 


t1  =  10 + 0.01 x1

t2  =    3 + 0.02 x2

t3  =    2 + 0.02 x3

t4  =    3 + 0.02 x4

t5  =    4 + 0.02 x5

t6  =  12 + 0.01 x6

 

t7  =    4 + 0.02 x7

(For both parts (a) and (b ), round up your time calculations to the nearest tenth of a minute.)

 

(a)   A CEE 3610 student calculated the user-equilibrium link flows as follows:


x1  =                            780

x2  =   20

x3  = 202

x4  = 120

x5  =                                     182

x6  =                                     818

x7  =                                      82 

Is he correct?  Why?

(b)   Another CEE 3610 student calculated the system-optimum link flows as follows:


x1  =    749

x2  =    51

x3  =    222

x4  =    151

x5  =    171

x6  =    829

x7  =    71


Is she correct?  Why? 

Reference no: EM13127964

Questions Cloud

Illustrate what amount will be recorded as goodwill : Burrough also paid $3,000 to a search firm for finder's fees related to the acquisition. Illustrate what amount will be recorded as goodwill by Burrough Corporation while recording its investment in Helyar?
Prepare a schedule to show the equity income : Prepare a schedule to show the equity income Tinker should recognize for 2011 related to this investment.
First payment from an annuity : This year Larry received the first payment from an annuity that promises to pay him $3,000 per month for the rest of his life. The IRS tables indicate that given Larry's age, he should expect to receive 310 monthly payments.
What are some general and administrative expenses : What are some general and administrative expenses that can appear on a merchandising company's income statement that would not appear on a service company's income statement?
Effect of bus fare on the demand for auto travel : The exponent of D in the above equation is +0.75.  What does this say about the effect of bus fare on the demand for auto travel? Is the demand for auto with respect to auto travel-time elastic or inelastic?  Please explain.
Total amount from agi deductions : The 2010 standard deduction amount is $11,400 and each exemption is $3,650. What is the total amount of from AGI deductions they are allowed to claim on their 2010 tax return?
What was the net change in cash : How much cash flow did the company have from Operating, Investing and Financing actvities.
Would you expect npv based on net income to be higher : Would you expect the NPV based on net income to be higher or lower than the NPV calculated using cash flows?
Applications of bluetooth : Question 1Compare the applications of Bluetooth with those of IEEE 802.11?Question 2What are the benefits on Bluetooth compared with 802.11?

Reviews

Write a Review

Microeconomics Questions & Answers

  Determining optimal combination of labor-capital

Crew Brew produces a popular brand of beer in its mini-brewery located on a small river in Kentucky. Assume that capital can be purchased for $8 per unit, and labor costs $6 per unit. What is the optimal combination of inputs for the firm to employ..

  Develop policy position on price floors

While referring to the "EYE on YOUR LIFE" section on page 183 of the textbook, apply this concept to your life. Develop your own policy position on price floors and price ceilings.

  Does the company produce managers or leaders

Given the mixed messages of the CEO's speech and the home office corporate culture, does the company produce managers or leaders? Show your work using game theory.

  Elasticity of demand

Price elasticity of demand, Income elasticity of demand and Cross elasticity of demand of toyota corolla car.

  Equilibrium price-quantity-consumer surplus

Assume that the demand curve for apples is given by Qd = 140 - 5P, where Qd is number of pounds demanded per year and p is the price per pound. The supply of apples can be described by Qs = 40 + 3P, where Qs is the number of pounds provided.

  Cost-plus pricing of wendel stove company

Cost-Plus Pricing. Wendel Stove Company is developing a "professional" model stove aimed at the home market. The company estimates that variable costs will be $2,000 per unit and fixed costs will be $10,000,000 per year.

  Determine the shutdown point for firms

The market is perfectly competitive which constant input prices and each firm has the same cost structure from the table listed below;

  Pigouvian tax-externalities

The private marginal benefit for commodity X is given by 10 - X where X is the number of units consumed. The private marginal cost of producing X is constant at $5. For each unit of X produced, an external cost of $2 is imposed on members of socie..

  Determining mc and mr for given functions

Employ the following equation to demonstrate why firm producing at the output level where MR=MC will also be capable to maximize its total profit.

  Describe the steps involved in taking a scientific approach

The queue length and waiting time for clients including and excluding the service time and the probability that there will be more than 2 customers waiting

  Differences between micoeconomics and maroeconomic

As an economist you have been tasked to address a meeting of a company on international professional to describe the differences between micoeconomics and maroeconomic and give real world example.

  Influence on the market supply of labour

Use a graphical illustration to describe briefly what the influence on the market supply of labour

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd