Transportation Economics & Finance Flashcards
6 cards from real CTE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Transportation Economics & Finance flashcards as text
What is the purpose of a Transportation Improvement Program (TIP)?
Answer: A short-range program listing federally funded projects for a 4-year period in an MPO area
A TIP is a prioritized, financially constrained list of transportation projects expected to receive federal funds within a metropolitan planning area over a four-year period.
In public-private partnerships (P3) for transportation, what is a 'availability payment' concession model?
Answer: The government pays the private partner based on facility availability and performance
In availability payment P3s, the public agency makes periodic payments to the private concessionaire contingent on the facility meeting specified performance standards, shifting demand risk to the public sector.
What financial metric represents the annual cost savings or revenue needed to justify a transportation capital investment, expressed as a percentage of initial cost?
Answer: Internal Rate of Return (IRR)
The Internal Rate of Return (IRR) is the discount rate at which NPV equals zero; if IRR exceeds the agency's cost of capital, the investment is financially justified.
What is 'formula apportionment' in the context of federal highway funding?
Answer: Funds allocated to states by statutory formulas using factors like lane-miles and VMT
Formula apportionments distribute federal highway funds to states automatically using data-driven factors such as vehicle miles traveled, lane-miles, and diesel fuel use.
Which method is FHWA's preferred approach for pavement type selection when comparing asphalt vs. concrete on federal-aid projects?
Answer: Life-Cycle Cost Analysis (LCCA)
FHWA requires that pavement type selection for federal-aid projects be based on LCCA, which compares the total present worth of agency and user costs over the analysis period.
What is 'tolling under value pricing' designed to achieve beyond revenue generation?
Answer: Managing traffic demand by varying toll rates with congestion level
Value pricing (congestion pricing) uses variable toll rates — higher during peak periods — to manage traffic demand, reduce congestion, and maintain reliable travel times.