FACULTY OF COMMERCE

DEPARTMENT OF MANAGEMENT STUDIES

EXAMINATION
_____________________________________________________________________________________

BACHELOR OF COMMERCE DEGREE PART 2 SEMESTER 2

TRANSPORT ECONOMICS MLT206

DATE JUNE 2015

DURATION 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. ANSWER ANY FOUR QUESTIONS

2. ALL QUESTIONS CARRY EQUAL MARKS

3. START EACH ANSWER ON A FRESH PAGE

4. SHOW ALL WORKINGS, WHERE APPLICABLE

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QUESTION 1
(a) Distinguish between economies of scale, economies of scope and economies of
density as they are used in the transport sector. [6 marks]
(b) Explain the factors that have led to the demand for transport services in modern day
societies. [19 marks]

[Total 25 marks]

QUESTION 2
(a) Explain the meaning of the following abbreviations in the transport industry:
(i) RORO [2 marks]
(ii) HS [1 marks]
(iii) SITC [1 marks]
(iv) CNF [2 marks]
(v) FOB. [1 marks]

(b) Define transport price elasticity of demand and cross price elasticity of demand.
[4 marks]
(c) Using the table below, explain the meaning of price elasticities indicated in each cell:

Generalised prices
Response Private car prices Bus prices
Private car demand - 0.03 0.09
Bus demand 0.17 - 0.19
[4 marks]

(d) Critically analyse any three measures of controlling negative transport externalities.
[10 marks]

[Total 25 marks]

QUESTION 3
(a) Briefly discuss the effectiveness of road toll fees towards transport infrastructure
development in Zimbabwe. [6 marks]
(b) In your opinion, what are the other options that can be implemented by the
Zimbabwean government to facilitate transport infrastructure development?
[10 marks]

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(c) Discuss the measures that can be put in place by both the central government and
local authorities to address the challenge of urban road and air congestion.
[9 marks]

[Total 25 marks]

QUESTION 4
(a) Explain the main entry barriers into the air and rail transport in Zimbabwe.
[8 marks]
(b) With reference to studied examples, analyse how deregulation has sought to
produce competitive markets for local bus services and air transport services in
Zimbabwe. [11 marks]
(c) Write short notes on the following, as used in the transport sector:
(i) Cut-throat competition [3 marks]
(ii) Moral suasion. [3 marks]

[Total 25 marks]

QUESTION 5
(a) State and explain three forms of road pricing. [6 marks]
(b) Evaluate the forms and rationale of government intervention into the transport in
Zimbabwe since 1980. [19 marks]

[Total 25 marks]

END OF EXAMINATION

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