Transportation Economics
Assignment # 1 – Introduction, Chapters 1, 2 and 3 – Due Feb, 7th.
Describe the factors that facilitate trade between Alberta and Ontario. Also, once a need for trade has been determined, what are the factors involved in transportation decisions, specific to the trade between the two provinces.
Labour, Oil and Natural Gas are the main factors that facilitate trade between Alberta and Ontario. Specialization in the production process: Complex jobs can usually be less expensively completed by a large number of people each performing a small number of specialized tasks than by one person attempting to complete the entire job. The idea that specialization reduces costs, and thereby the price the consumer pays, is embedded in the principle of comparative advantage. Division of labour is the basic principle underlying the assembly line in mass production systems.
Trade framework can be developed that illustrates the impact of transportation costs and the precise nature of the derived demand for transport. The Law of One Price (LOOP) holds that all prices are connected geographically by differences in logistics costs. The principle logistical cost in export trade is transportation. Trade thus creates a derived demand for transportation. The interregional trade model that is based on LOOP is presented in this section.
The interregional trade model presents transportation as a facilitator of trade rather than as a factor in the production process. Assume a world of two regions where price differences for a product exist in the absence of trade because of differences in factor endowments. Region A is a low cost producer, while Region B is a high cost producer of this product
Explain how the advances in communication have lead to growth in the transportation industry and how these same advances can reduce the demand for transportation. Also, discuss how the correlation between communication and transportation has lead to a globalized economy.
International
Describe the factors that facilitate trade between Alberta and Ontario. Also, once a need for trade has been determined, what are the factors involved in transportation decisions, specific to the trade between the two provinces.
Labour, Oil and Natural Gas are the main factors that facilitate trade between Alberta and Ontario. Specialization in the production process: Complex jobs can usually be less expensively completed by a large number of people each performing a small number of specialized tasks than by one person attempting to complete the entire job. The idea that specialization reduces costs, and thereby the price the consumer pays, is embedded in the principle of comparative advantage. Division of labour is the basic principle underlying the assembly line in mass production systems.
Trade framework can be developed that illustrates the impact of transportation costs and the precise nature of the derived demand for transport. The Law of One Price (LOOP) holds that all prices are connected geographically by differences in logistics costs. The principle logistical cost in export trade is transportation. Trade thus creates a derived demand for transportation. The interregional trade model that is based on LOOP is presented in this section.
The interregional trade model presents transportation as a facilitator of trade rather than as a factor in the production process. Assume a world of two regions where price differences for a product exist in the absence of trade because of differences in factor endowments. Region A is a low cost producer, while Region B is a high cost producer of this product
Explain how the advances in communication have lead to growth in the transportation industry and how these same advances can reduce the demand for transportation. Also, discuss how the correlation between communication and transportation has lead to a globalized economy.
International