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Transportation Decision Making

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Please show all work for this and explain your derivations. Lack of step-by-step work will not be credited. Partial credit will be given for step-by-step description of answer.

In your own words, describe the meaning of average cost. You normally buy a crate of wine for $75. One crate has 6 bottles of wine. After a month, the store clerk informs you that the same crate of wine now costs $82. However, there are 7 bottles in a crate. To the nearest cent, determine the average cost of the crate from last month to now. ____(20 points)

In your own words, describe the meaning of marginal cost. You normally buy a crate of wine for $75. One crate has 6 bottles of wine. After a month, the store clerk informs you that the same crate of wine now costs $82. However, there are 7 bottles in a crate. To the nearest cent, determine the marginal cost for one additional bottle of wine now. (20 points)

In your own words, describe the meaning of unit travel. When traveling on a Greyhound bus, without intervention or obstruction, it is important to determine the unit travel time. If you leave Cleveland in a bus full of 24 passengers and arrive Cincinnati in 3 hours, what will be the average unit travel time in person minutes? ____(20 points)

What is CPI? Given that the CPI trends for travel time for 2010 and this year are 183.42 and 191.35 respectively, calculate the current value of travel time if it was $24.50 per hour in 2010. ____(20 points)

After 17 vehicular accidents two years ago in a given intersection, the mayor of Boulder proposed to reduce the number of crashes by making improvements at the intersection. Assuming the appropriate CRF is 0.53, what will be the reduction in number of crashes at that intersection achieved by the mayor? (20 points)

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Solution Summary

The solution answers 5 elementary questions on average cost, marginal cost, unit travel, crash reduction factor etc.

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1) In your own words, describe the meaning of average cost. You normally buy a crate of wine for $75. One crate has 6 bottles of wine. After a month, the store clerk informs you that the same crate of wine now costs $82. However, there are 7 bottles in a crate. To the nearest cent, determine the average cost of the crate from last month to now.

Meaning of Average Cost: Average Cost is the cost per unit. It is obtained by dividing total cost by total quantity.
Average Cost = Total Cost / Number of units
Average cost last month= $ 75 /6= $ 12.50 per bottle
Average cost now= $ 82 /7= $ 11.71 per bottle

2) In your own words, describe the meaning of marginal cost. You normally buy a crate of wine for $75. One crate has 6 bottles of wine. After a month, the store clerk informs you that the same crate of wine now costs $82. However, there are 7 bottles in a crate. ...

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