TSCM 325 Exam 1 Study Guide 1. Explain the importance of transportation at the g
ID: 388216 • Letter: T
Question
TSCM 325 Exam 1 Study Guide 1. Explain the importance of transportation at the global, national, and local levels 2. Explain what is meant when we say that transportation has a derived or dependent demand. Discuss the 7 reasons people desire transport. Explain Weber's theory of industrial location and the variations related to weight gain or loss in production. Based on this would International Paper prefer to locate a factory near sources of inputs (forests) or near their markets? Explain what happens to market area and output as transport costs are reduced. Why does this happen? Although not proven empirically, it has been suggested that people will be willing to takea lower paying job to save on transportation costs (generalized cost). Explain why you agree with this or don't agree with this theory Explain how there exists both variation in transportation demand and stability in transportation demand. Use examples from class and/or your own experiences In the short run is the price elasticity of demand for transport elastic or inelastic? What happens in the long run? Explain these phenomena. When transport is considered a need by a government, what happens to the output and price of transportation? Explain why this happens and why you agree or disagree with the concept of transportation as a need 3. 5. 6. 7. 8.Explanation / Answer
Answering the first 4 questions:
1. The importance of transportation at global level:
The importance of transportation at national level:
The importance of transportation at local level:
2. Transportation is considered as a derived demand because a user demands a transport to fulfill his wish or need to access other services or products.
7 reasons why people desire transport:
3. Weber’s theory of industrial location states that an industry is usually located at a place where the transportation cost of inputs to the industry i.e. raw materials and the transportation costs of outputs i.e. final products is minimum.
Transportation costs depend on the nature of terrain as well as the connectivity and accessibility of the region. As the markets will be quite easily feasible, having better terrain and better connectivity, the factory will be located near the markets.
4. If the market area and outputs of business decrease, the feasibility of doing transportation decreases as the cost incurred in traversing the route will become quite costly.
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