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TEC711S-TRANSPORT ECONOMICS-1ST PP-NOV- 2025 |
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nAmlBIA unlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCES AND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION : BACHELOR OF ECONONOMICS
QUALIFICATION CODE: 07BECO
LEVEL: 7
COURSE CODE: TEC711S
COURSE NAME: TRANSPORT ECONOMICS
SESSION: NOVEMBER 2025
DURATION: 3 HOURS
PAPER: THEORY (PAPER 1)
MARKS: 100
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER(S) Mr. Eslon Ngeendepi
MODERATOR: Dr. Anthony Adeyanju
INSTRUCTIONS
1. Answer ALL the questions.
2. Read all the questions carefully before answering.
3. Number the answers clearly
THIS QUESTION PAPER CONSISTS OF_4_ PAGES (Including this front page)
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QUESTION 1
[10 Marks]
i. Define transport economics.
(2)
ii. Outline three major economic characteristics of transport.
( 6)
iii. Consider the demand for airline services in Namibia. Identify two factors
(demand shifters) that could increase or decrease the demand for these services.
(2)
QUESTION 2
°[20 Marks]
A local Namibian bus company operates a single route between Windhoek and
Okahandja. The company has collected the following cost information for one of its
buses over a week:
• Total fixed costs (garage rent, insurance, license fees) = N$3,000 per week
• Fuel and maintenance costs= N$2 per km
• The bus travels 1,200 km per week
• The bus earns revenue of N$12 per km
(a) Calculate the total variable cost (TVC) for the week.
(6)
(b) Calculate the total cost (TC) for the week.
( 6)
(c) Calculate the average cost per km (AC).
(4)
(d) Calculate the total profit or loss for the week.
(4)
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QUESTION 3
[30 Marks]
3.1
A Namibian city bus company is analyzing the demand for its services in Windhoek. The
following data has been collected:
• Current bus fare: N$10 per triri
• Current monthly passengers: 12,000 trips..:
• When the fare is increased to N$12, monthly passengers fall to 10,800 trips.
• Average monthly income of commuters is N$8,000, and when income rises to
N$8,500, quantity demanded increases to 12,500 trips.
• The price of a competing minibus service rises from N$9 to N$11, and the
quantity demanded for the bus increases from 12,000 to 12,300 trips.
(a) Calculate the price elasticity of demand (PED) using point elasticity and interpret
the result.
(8)
(b) Calculate the income elasticity of demand (YED) and classify the type of good. (8)
(c) Calculate the cross elasticity of demand (XED) with respect to the competing
minibus service and interpret.
(8)
(d) Calculate the total revenue before and after the fare change and explain whether
the fare increase was beneficial for the bus company.
(6)
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QUESTION 4
[20 Marks]
(a) Discuss the rationale for regulating transport services. In your answer, highlight
at least four reasons why regulation is necessary in the transport sector. (8)
(b) List two main forms of transport regulation.
(2)
(c) Private transport services, such as cars, vans, and motorcycles, involve multiple
costs that affect pricing. Identify and briefly explain four main types of costs that
a private motorist may incur.
(8)
(d) Define tacit collusion (cartel).
(2)
QUESTION 5
[20 Marks]
(a) State and briefly explain four main objectives of project evaluation/appraisal. (6)
(b) City of Windhoek is experiencing increasing traffic congestion and high transport
costs for commuters. To address this, the city council is considering developing a
new public bus transport system to improve mobility, reduce congestion, and
lower commuting costs. Before launching the project, the council must follow a
structured project development process to ensure feasibility, efficiency, and
sustainability. As a student of Transport Economics, list and briefly explain the
typical steps involved in project development that the city council should follow
in designing and implementing this public transport system.
(14)
TOTAL MARKS: 100
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