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

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

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