|INSTRUCTOR DISCUSSION NOTES:
Cities See the Light (Rail)
1. Why is the government willing to partially subsidize installation costs of light rail systems nationwide?
Light rail transportation systems provide an external benefit to society, and government is subsidizing to reduce market price to consumers, so that the external benefit becomes internalized.
2. If bus service is so much cheaper, why are cities eschewing their public buses in favor of light rail? Use a cost/benefit analysis to frame your answer.
Answers may vary here. Get them to focus on specific costs and benefits of trains versus buses. Trains have much higher fixed costs, but marginal costs may be lower, especially in terms of maintenance and scheduling. You might also discuss the "psychic costs" of being associated with an "outdated" mode of transportation like buses.
3. Suppose you were given the option of designing a light-rail public transport system for your city or town. What would it look like, and where would it go? Why would you choose those destinations?
Answers may vary, but should in some way address cost-benefit analysis.
©2007 South-Western. All Rights Reserved webmaster | DISCLAIMER