TR 421 TRANSPORTATION ECONOMICS

Tutorial 2 (29/05/2024)

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1. A transport firm’s returns to scale is 𝑠 = 𝐸𝑐,𝑇 where Ec,T is elasticity of total cost. If Ec,T is
equal to one then firm will have
a) Increasing returns to scale
b) Decreasing returns to scale
c) Constant returns to scale
d) None of these
2. How non-road users are exempted from paying fuel levy?
3. In the introduction of transport economics, we discussed congestion. What are the main
causes of congestion (mention at least 5 different aspects. How can it be
minimized/abolished?
4. What aspects of the railway track, runway, or guideway makes the agency/operator spend
more on gas, oil, tires, etc. (VOC components)?
5. For long run market supply function for transport, which one of the below does not cause
increase in supply
a) Increase in the number of transporters
b) Decrease in the price of inputs
c) Decrease in subsidies given to Transport
d) Decrease in Taxes on Transport
6. For long run market supply function for transport, which one of the below does not cause
decrease in supply
a) Increase in the number of transporters
b) Increase in the price of inputs
c) Decrease in subsidies given to Transport
d) Increase in Taxes on Transport
7. For long run market supply function for transport, which one of the below does not cause
decrease in supply
a) Decrease in the number of transporters
b) Increase in the price of inputs
c) Increase in subsidies given to Transport
d) Increase in Taxes on Transport