[ Correct ] Principles Of Transportation Economics

Question 1What is an stinting object lesson and ideally what characteristics would we like our scotch beats to satisfyTrevor Jones (2005 ) wrote that frugals identifies various market failures that make the community worsened off (p . 38 . In this line of thinking , he said that [economic] mannikins of the market assume that private and social cost and benefits coincide (Jones , 2005 ,. 38More specifically , an economic model is the costation of trustworthy economic activities or processes of a specific economic entity . This model might be a diagrammatic , mathematical , indite or verbal representation . Let s consider the economic model of a business Hirschey (2002 ) created a mathematical model of the primary goal of a business - that is , profit maximation in the short run and expected survey maximisation in the long run (pp . 5-6 . The author clarified that [the] value of the firm is the present value of the firm s expected time to come net cash flow (pp . 5-6Figure 1 shows the foregoing economic model of a for-profit organizationSource : Hirschey , 2002 ,. 6Where ?1 ?2 ?n represent the expected profits in each year , t and i is the appropriate interest or discount roam for that businessThe characteristics that I would requisite my economic model to satisfy areFirst , it should be able to provide the teaching that the users of the model needs in decision makingSecond , it moldiness be able to compare alternativesThird , it must also take into account several economic information that are difficult to quantifyThe economic model should be parsimonious (Skeels , 2006 ,. 257The model can be used by a different economic entity within the same setting (Saatcioglu , Korap Volkan , 2007 ,.

51Question 2Suppose that you take on a simple economic model that shipper demands for passage run cipher upon the impartation rate charged (a ) Identify the develop and effect relationship in this modelThe economic model for this bunk is mathematical , and it would appear like thisDt f (txWherein Dt represents the shipper demands for transportation crop and tx is the transportation rate chargedThe above mathematical representation of the model means that the center of transportation services shipper demands is a function of the transportation rate . In other words , as the transportation rates charged by shipping companies the amount of transportation a shipper demands goes down . Consequently , as the transportation rate goes down , then the transportation demanded by a shipper increases . This type of relationship between two or to a greater extent variables is called inverse relationship (b ) Why is this model a soft model of shipper demandsThe economic model of the shipper demands for transportation services which depend upon the transportation rate charged is qualitative becausethe model tries to tribulation the hypothesis that the shipper demands for transportation services depend on the transportation rate chargedin general , qualitative model [describes] systematic structures and processes (Heise Durig , 1999 . In this scenario , the model is describing the structure governing the shipper demands for transportation services andalthough , the model...If you want to get a full essay, order it on our website: Ordercustompaper.com

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