A2 transport economics definitions

Terms in this set (15)

Deregulation
Removal of government rules and regulations controlling the operation of a business. Deregulation often removes barriers to entry making a market more contestable (bus and airline market)
Privatisation
The selling of nationalised companies to the private sector
Integrated transport policy
Where public transport is linked together to provide a single coherent and easy to use network. Timetables between buses and trains coincide and customers can purchase a single ticket (oyster card) to be used on any mode of public transport. This is made more difficult by the privatisation of buses and trains
PFI
Where investment projects into transport such as Channel Tunnel rail are partly funded by the private sector
Public Private Partnership
The London Underground
Hypothecation
Where a specific tax is used for a specific purpose, eg. The congestion charge is used to invest in London public transport
Real choice
Providing all sectors of society with a choice of modes of transport (other than just the car). It ensures social inclusion for those on low incomes and/or without a car, enabling them to access essential amenities such as hospitals
Sustainability
Meeting the needs of today without affecting future generation's ability to meet their needs
Road Pricing
Charging for the use of the road network. It is a market based (financial) solution to road congestion
Infrastructure/operations
Infrastructure=ports, roads, rail track and stations.
Operations = cars, lorries, ships and trains (the vehicle)
Allocative efficiency
Where MC=P. It is where businesses produce the goods that are most wanted at the least possible cost
Productive efficiency
Producing at the lowest point on the average cost curve. It is where MC=AC as the MC curve always cuts the bottom of the AC curve
Public goods
Non-rival and non-excludable
Natural Monopoly
A situation where very high start up costs which are sunk costs relative to vry low variable cost make it uneconomic to duplicate the supply of a product or service
Re-centralisation
A situation where a monopolistic market structure overtime, through a series of mergers and failures reverts to a less competitive more oligopolisitc market structure
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