Fare F ($/trip) and travel time T (hr/trip) for Bus and Rails are given Bus: F= 40, T = 3 Rail: F = 56, T=2.5 We have a utility function u = -0.005 F -0.1 t * Use the logit model to find the probability of choosing bus * What change in rain rare would achieve the probability of choosing rail to be 55%? * What value use time is implied by the utility function? Start to think about the utility of one-hour a. it will be #% b. #$ c. $20$/hr
Fare F ($/trip) and travel time T (hr/trip) for Bus and Rails are given Bus: F= 40, T = 3 Rail: F = 56, T=2.5 We have a utility function u = -0.005 F -0.1 t * Use the logit model to find the probability of choosing bus * What change in rain rare would achieve the probability of choosing rail to be 55%? * What value use time is implied by the utility function? Start to think about the utility of one-hour a. it will be #% b. #$ c. $20$/hr
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Fare F ($/trip) and travel time T (hr/trip) for Bus and Rails are given
Bus: F= 40, T = 3
Rail: F = 56, T=2.5
We have a utility function u = -0.005 F -0.1 t
* Use the logit model to find the probability of choosing bus
* What change in rain rare would achieve the probability of choosing rail to be 55%?
* What value use time is implied by the utility function?
Start to think about the utility of one-hour
a. it will be #%
b. #$
c. $20$/hr
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VIEWStep 2: Find the probability of choosing bus using the logit model
VIEWStep 3: Find the change in rail fare to achieve the probability of choosing rail by 55%
VIEWStep 4: Find the value of use time implied by the utility function
VIEWStep 5: Mention the answers by thinking about the utility of one-hour
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