Problem 1 - Traveling from Fairview to Makati The MMDA is studying the daily travel behavior of commuters going from Fairview to the Makati Central Business District (CBD). Commuters mainly choose between two modes: Private Car and City Bus. The estimated utility functions are: U_(car)=1.2-0.05T_(car)-0.02C_(car) U_(bus)=0.8-0.06T_(bus)-0.01C_(bus)

Question

Problem 1 - Traveling from Fairview to Makati The MMDA is studying the daily travel behavior of commuters going from Fairview to the Makati Central Business District (CBD). Commuters mainly choose between two modes: Private Car and City Bus. The estimated utility functions are:

U_(car)=1.2-0.05T_(car)-0.02C_(car)
U_(bus)=0.8-0.06T_(bus)-0.01C_(bus)

where: Survey data shows:

T=

total travel time (in minutes)

*T_(car)=40 minutes, C_(car)=150
*T_(bus)=60 minutes, C_(bus)=50

C=

travel cost (in pesos) To improve travel efficiency, the MMDA is planning a dedicated by ; lane along EDSA that will reduce bus travel time by 10 minutes. (

5

pts) Compute the utilities car

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