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

  Impact of a decrease in the price of memory chips

The impact of a decrease in the price of memory chips on the market for computers and impact of the government imposing a price ceiling on apartment rents

  Develop production from the opportunity

Demonstrate that the expression on the right in fact represents the sum of the series on the left, Draw an appropriate cash flow diagram and indicate the formulas and factors used to evaluate the cash flow diagram

  Government involvement in a market economy

Describe why government regulation is required, citing the major reasons for government involvement in a market economy.

  Short-run labor demand curve

Consider the firms short run decision to hire workers. Suppose that a firm produces goods for sale in the perfectly competitive market. labor markets are competitive as well.

  Draw the isoquant for an output level

Consider a company that uses two inputs. The quantity used of input one is denoted by x_1 and quantity used of input 2 is denoted by x_2.

  Calculate the expected value of returns of stock

Using Minitab estimate the expected value of its profits and standard deviation of profits and calculate the expected value of returns of stock A & B

  Draw a standard supply and demand diagram

Draw a standard supply and demand diagram which shows the demand for new housing units that are purchased each month, and the supply of new units built and put on the market each month.

  Consumers to make optimal intertemporal decisions

what are the trade offs involved between current and future consumption/production? In the absence of government intervention, would we expect the consumers/producers to make optimal intertemporal decisions?

  Concepts of marginal costs and marginal revenues

Using the ideas of marginal costs and marginal revenues, describe why economic profits are maximized where marginal revenue equals marginal cost and why profits decline if price is above or below the profit maximizing price.

  Pros and cons of conducting an experimental versus

What are the pros and cons of conducting an experimental versus an observational study? What are examples of these studies? Can both types of studies be used for all projects?

  Description of demand function

The general demand function for a good, Good A, is: Is Good A a normal good or an inferior good? How do we know exactly?

  Shift of the aggregate demand and supply curve

Estimate whether each of the following would cause a shift of the aggregate demand curve, the aggregate supply curve, neither, or both.

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