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Test Bank For Transportation A Global Supply Chain Perspective, 10th Edition Robert A. NovackBrian GibsonYoshinori Suzuki Chapter 1-13

Chapter 01: Global Supply Chains: The Role and Importance of Transportation

1. Transportation has been described as: a. The glue that holds the supply chain together b. Challenging and unnecessary c. A gamechanger d. Expensive service ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense. 2. Which of the following countries has the largest export trade flow of merchandise? a. China b. United States c. Germany d. Japan ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense. 3. Which of the following countries has the largest import trade flow of merchandise? a. China b. United States c. Germany d. Japan

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ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense. 4. In 2020, the top 30 exporting countries account for what percentage of the world‘s export of merchandise trade? a. 31.7% b. 85.3% c. 86.9% d. 90% ANSWER: c POINTS: 1 DIFFICULTY: Medium REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense. 5. Insight into the health of a supply chain can be gained by review of the volume of global trade and: a. gross domestic partner b. gross domestic product c. global imports only d. global exports only ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.2 - Discuss the importance of transportation to globalization and how it contributes to the effective flow of commerce among close and distant regions. 6. Which of the following led to the spectacular growth in global trade between the year 2000 and the present? a. Greater acceptance of products manufactured in other countries b. Elimination of trade agreements c. Higher tariffs d. The recent pandemic ANSWER: a

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POINTS: 1 DIFFICULTY: Medium REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense. 7. Which country is ranked third in both import and export flows of merchandise? a. China b. Germany c. Japan d. United States ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.2 - Discuss the importance of transportation to globalization and how it contributes to the effective flow of commerce among close and distant regions. 8. Which of the following countries had the largest population in 2022? a. United States b. China c. India d. Indonesia ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: The Economic Basis and Logic of Improved Global Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.6 - Discuss the size and age distribution of the population and the growth rate of the major countries of the world and understand how the size of the population can impact a country positively or negatively. 9. Which of the following countries is expected to have the largest population by 2050? a. United States b. China c. India d. Indonesia ANSWER: c POINTS: 1

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DIFFICULTY: Easy REFERENCES: The Economic Basis and Logic of Improved Global Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.6 - Discuss the size and age distribution of the population and the growth rate of the major countries of the world and understand how the size of the population can impact a country positively or negatively. 10. In 2020, what percentage of people in the world were 60 years or older? a. 1.9% b. 11.6% c. 18.5% d. 20% ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Contributing Factors for Global Flows and Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.6 - Discuss the size and age distribution of the population and the growth rate of the major countries of the world and understand how the size of the population can impact a country positively or negatively. 11. In 2020, what estimated percentage of the world‘s population lived in urban areas? a. 29% b. 30% c. 47% d. 56.1% ANSWER: d POINTS: 1 DIFFICULTY: Easy REFERENCES: Urbanization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.7 - Understand the challenges and opportunities associated with the world-wide growth in urbanization and why there has been such a major shift from rural to urban areas. 12. What of the following continents is estimated to have 18 megacities? a. Europe b. South America c. Africa d. Asia ANSWER: d POINTS: 1 DIFFICULTY: Medium

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REFERENCES: Urbanization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.7 - Understand the challenges and opportunities associated with the world-wide growth in urbanization and why there has been such a major shift from rural to urban areas. 13. What positive outcomes have occurred in the global economy with increased interdependence? a. Reduced prices b. Limited availability of goods c. Lower employment opportunities d. Higher prices ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.5 - Explain the underlying economic basis for international exchange of goods and services for the overall benefit of two or more countries or regions and gain some perspective on the volume and overall importance of the more advanced countries of the world. 14. On the micro level, global interdependence has ___________. a. increased competition b. decreased the level of complexity c. reduced outsourcing d. increased product lifecycles ANSWER: a POINTS: 1 DIFFICULTY: Hard REFERENCES: Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.5 - Explain the underlying economic basis for international exchange of goods and services for the overall benefit of two or more countries or regions and gain some perspective on the volume and overall importance of the more advanced countries of the world. 15. When did the supply chain management concept capture the attention of senior level executives in many organizations? a. 1960s b. 1980s c. 1990s d. 2000s ANSWER: c POINTS: 1 DIFFICULTY: Easy

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REFERENCES: Supply Chain Concept QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.5 - Explain the underlying economic basis for international exchange of goods and services for the overall benefit of two or more countries or regions and gain some perspective on the volume and overall importance of the more advanced countries of the world. 16. Reverse logistics systems are developed for: a. returning unacceptable products b. returning rail box cars c. eliminating empty back hauls d. receiving payment from customers ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: Supply Chain Concept QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.3 - Understand how global supply chains can contribute to the competitive position of countries and allow them to penetrate global markets. 17. Forward information in the supply chain is utilized to: a. provide advanced shipment notices b. reduce the need for working capital c. decrease the visibility of inventory levels d. Eliminate the empty back hauls ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Supply Chain Concept QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.3 - Understand how global supply chains can contribute to the competitive position of countries and allow them to penetrate global markets. 18. Cash flow is important to organizations producing products for sale because it: a. reduces the need for working capital b. eliminates the need for checks to pay vendors c. provides bonus money for employees d. increases viability of inventory levels ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Supply Chain Concept QUESTION TYPE: Multiple Choice

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HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.3 - Understand how global supply chains can contribute to the competitive position of countries and allow them to penetrate global markets. 19. Which of the following is not a major flow in a supply chain? a. Information b. Raw material c. Financials d. Products ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Supply Chain Concept QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.9 - Explain why technology has become such an important ingredient for the economic progress of companies and countries in today‘s global economy and understand the need for and types of technology. 20. One effective method to reduce the bullwhip effect in a supply chain is to replace inventory with: a. information b. outsourcing c. financials d. transportation ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Supply Chain Concept QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.9 - Explain why technology has become such an important ingredient for the economic progress of companies and countries in today‘s global economy and understand the need for and types of technology. 21. Which of the following countries are in the VISTA? a. Vietnam, Indonesia, South Africa, Turkey, and Argentina b. Vietnam, Indonesia, Singapore, Thailand, and Australia c. Vietnam, India, Singapore, Turkey, and Argentina d. Vietnam, India, South Africa, Thailand, and Australia ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False

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LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense. 22. Which of the following countries are in the BRIC? a. China, Bulgaria, Romania, and Indonesia b. Brazil, Russia, India, and China c. Mexico, Honduras, Panama, and El Salvador d. Britain, Canada, Italy, and Russia ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense. 23. Adam Smith wrote a book entitled: a. The China Syndrome b. Total Cost of Transport c. The Logistician’s Guide d. The Wealth of Nations ANSWER: d POINTS: 1 DIFFICULTY: Easy REFERENCES: Global Supply Chain Flows QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.3 - Understand how global supply chains can contribute to the competitive position of countries and allow them to penetrate global markets. 24. Another name for the extended enterprise perspective of the supply chain is: a. boundary spanning b. slow and low c. flat earth d. absolute advantage ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Supply Chain Concept QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.3 - Understand how global supply chains can contribute to the competitive position of

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countries and allow them to penetrate global markets. 25. The size of a country‘s population is important because: a. governments must provide food b. land use increases c. labor is a prime factor for economic growth d. transportation networks must be developed ANSWER: c POINTS: 1 DIFFICULTY: Medium REFERENCES: Contributing Factors for Global Flows and Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO1.8 - Appreciate the importance and impact of land and resources to the economic advancement and development of the various countries of the world and how they can be exploited to their advantage. 26. Advantages to globalization include: a. lower prices b. limited availability of goods and services c. low employment opportunities d. higher prices ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Supply Chain Concept QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 1.5 - Explain the underlying economic basis for international exchange of goods and services for the overall benefit of two or more countries or regions and gain some perspective on the volume and overall importance of the more advanced countries of the world. 27. What is the meaning of a ―black swan‖ event with regard to transportation? ANSWER: The term ―black swan‖ refers to the hoarding of certain necessities and demand far exceeding consumption. POINTS: 1 DIFFICULTY: Easy REFERENCES: Global Supply Chain Flows QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense.

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28. What is a megacity? ANSWER: A relatively new term to describe cities with populations over ten million. POINTS: 1 DIFFICULTY: Medium REFERENCES: Urbanization QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.7 - Understand the challenges and opportunities associated with the world-wide growth in urbanization and why there has been such a major shift from rural to urban areas. 29. What are the two important dimensions of technology? ANSWER: Technology can be viewed as both an internal and external agent of change for organizations. POINTS: 1 DIFFICULTY: Hard REFERENCES: Technology and Information QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.9 - Explain why technology has become such an important ingredient for the economic progress of companies and countries in today‘s global economy and understand the need for and types of technology. 30. Why was the development of the Internet such an important external change agent? ANSWER: The Internet alone was the biggest ―culprit‖ or agent of change because it made information available in real time to large segments of the population via their personal computers, telephones, or other devices. POINTS: 1 DIFFICULTY: Medium REFERENCES: Technology and Information QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.9 - Explain why technology has become such an important ingredient for the economic progress of companies and countries in today‘s global economy and understand the need for and types of technology. 31. Describe ―3D‖ printing. ANSWER: It is also called additive manufacturing and allows corporations and other organizations to duplicate or make a physical copy of an object, similar to what happens with 2-D copy machines. POINTS: 1 DIFFICULTY: Medium REFERENCES: Technology and Information QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False

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STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.9 - Explain why technology has become such an important ingredient for the economic progress of companies and countries in today‘s global economy and understand the need for and types of technology. 32. What factors accounted for growth in the volume of global trade? ANSWER: A number of factors came into play: economic growth, trade agreements, lower tariffs, and a greater acceptance of importing finished products that were manufactured in other countries, not just raw materials. POINTS: 1 DIFFICULTY: Medium REFERENCES: Global Supply Chain Flows QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.1 - Appreciate why efficient transportation systems are so critical to advance the growth and development of regions and countries, and how they contribute to social and political systems as well as national defense. 33. Differentiate between absolute and comparative advantage. ANSWER: While both concepts provide a rationale for trade between regions or countries, there is a difference. Absolute advantage postulates that trade is beneficial when the two regions or countries both have an advantage in producing one of two products in terms of cost. Absolute advantage recommends that they each produce the one product where they have the advantage; then, trade will be mutually beneficial. Comparative advantage postulates that even if one country or region has a low-cost advantage for both products, trade can be beneficial if the low cost country has a comparative advantage in one of the products. POINTS: 1 DIFFICULTY: Hard REFERENCES: The Economic Basis and Logic of Improved Global Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.3 - Understand how global supply chains can contribute to the competitive position of countries and allow them to penetrate global markets. 34. Besides a country‘s population, name the demographics important for economic growth? ANSWER: In addition to size, education and skill levels are important indicators of labor efficiency. The age distribution of the country‘s population is also important. A younger population usually means a larger labor pool and more potential for families and market demand. The general health of citizens and average life span are of interest. POINTS: 1 DIFFICULTY: Medium REFERENCES: Contributing Factors for Global Flows and Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic

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LEARNING OBJECTIVES: LO 1.3 - Understand how global supply chains can contribute to the competitive position of countries and allow them to penetrate global markets. 35. What is a megacity, and why are they important for the future? ANSWER: The term megacity is relatively new and describes urban areas with populations over ten million. They represent a world-wide trend of populations migrating to urban areas. In developing nations, the major challenges will be creating the infrastructure, transportation systems, and utilities to support the population adequately. POINTS: 1 DIFFICULTY: Medium REFERENCES: Urbanization QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.7 - Understand the challenges and opportunities associated with the world-wide growth in urbanization and why there has been such a major shift from rural to urban areas. 36. Why was information technology so impactful for businesses and other organizations? ANSWER: Information technology has been a major factor in increasing competition, changing business models, and making some businesses obsolete. It has expedited outsourcing strategies and provided an opportunity for businesses, large or small, to participate in supply chains over a wider geographic area. Information technology has afforded both opportunity and disruption, and the end is not in sight. POINTS: 1 DIFFICULTY: Medium REFERENCES: Technology and Information QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.9 - Explain why technology has become such an important ingredient for the economic progress of companies and countries in today‘s global economy and understand the need for and types of technology. 37. What impact has robotics had on supply chains? ANSWER: The skills of humans combined with the precision and efficiency of robots have led to improved productivity in distribution centers where the robots store, retrieve, and pack goods for distribution. More is yet to come! POINTS: 1 DIFFICULTY: Medium REFERENCES: Technology and Information QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.9 - Explain why technology has become such an important ingredient for the economic progress of companies and countries in today‘s global economy and understand the need for and types of technology.

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38. Explain the three major flows in a supply chain. ANSWER: The three major flow areas are: product/services, information, and finances. Product flow is a traditional area of importance for logistics to acquire, make, and distribute finished products in an efficient and timely manner. It is directly dependent upon efficient transportation. Information flow becomes a very important factor for success in supply chain management; figuratively, information is the trigger or signal for the logistics or supply chain system to respond to a customer‘s order. Financial cash flow is the payback for efficiently and effectively accomplishing the supply chain's objectives. POINTS: 1 DIFFICULTY: Hard REFERENCES: Supply Chain Concept QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.2 - Discuss the importance of transportation to globalization and how it contributes to the effective flow of commerce among close and distant regions. 39. What is the bullwhip effect, and why is it important? ANSWER: When there is uncertainty about demand and long intervals between information flows, inventory builds up in the supply chain to prevent stock outs. The further back in the supply chain an organization is from the market, the greater the uncertainty, usually the higher the level of safety stock. POINTS: 1 DIFFICULTY: Hard REFERENCES: Supply Chain Concept QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.2 - Discuss the importance of transportation to globalization and how it contributes to the effective flow of commerce among close and distant regions. 40. Describe the three phases of development for the supply chain concept. ANSWER: The three phases are: physical distribution, business logistics, and supply chain management. Physical distribution was developed during the 1960s with a focus on the outbound side of a producer. In other words, this involved the period after a product was produced until it reached the customer and focused on minimizing the total cost of that phase. Business logistics added the inbound side with a continued focus upon the lowest total cost. Supply chain management focused on extended enterprises and the three major flows— products, information, and cash. POINTS: 1 DIFFICULTY: Hard REFERENCES: Supply Chain Concept QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 1.2 - Discuss the importance of transportation to globalization and how it contributes to

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the effective flow of commerce among close and distant regions.

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Chapter 02: Transportation and the Economy 1. The more efficient the transportation system, the: a. greater the possibility of scale economies and increased market areas. b. greater the possibility of scale economies and decreased market areas. c. lesser the possibility of scale economies and increased market areas. d. lesser the possibility of scale economies and decreased market areas. ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Historical Significance QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.1 - Understand the importance of transportation to the economic vitality of the United States and other countries and regions and why it is probably our most important industry. 2. Transportation systems are critical to developed economies because: a. they bring chaos. b. they bring order out of chaos. c. they bring fewer jobs. d. they decrease war. ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Historical Significance QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.1 - Understand the importance of transportation to the economic vitality of the United States and other countries and regions and why it is probably our most important industry. 3. What was the primary reason for the creation of the U.S. interstate highway system? a. Commerce b. Defense c. To create depression era jobs d. To promote manufacturing ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: Economics of Transportation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.2 - Appreciate the role and contributions of transportation systems to the economic development of countries or regions. 4. A transportation shipment of 75 tons for 125 miles would be:

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Chapter 02: Transportation and the Economy a. 200 ton-miles b. 3125 ton-miles c. 6250 ton-miles d. 9375 ton-miles ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 5. If a product costs $100 to produce, the firm expects 15% margin on the cost to produce, and transportation per unit costs $5, what is the lowest price the firm is likely to accept for the product? a. $100 b. $105 c. $115 d. $120 ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 6. Based on Lardner‘s Law, if transportation costs decrease by $2500, how much does the relevant market area increase? a. 50% b. 200% c. 400% d. 600% ANSWER: b POINTS: 1 DIFFICULTY: Hard REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 7. What key element is critical to the ability to sell products made in large scale production facilities?

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Chapter 02: Transportation and the Economy a. Efficient transportation b. Highly technical production c. Just in time sourcing d. High quality design ANSWER: a POINTS: 1 DIFFICULTY: Hard REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 8. Which mode of transportation is most important in terms of freight ton-miles? a. Air Carriers b. Rail Carriers c. Motor Carriers d. Pipelines ANSWER: c POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 9. Which mode of transportation is most important in terms of passenger-miles? a. Air Carriers b. Rail Carriers c. Motor Carriers d. Water Transport ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 10. What was the average percentage of passenger-miles traveled in the United States in 2020? a. 14

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Chapter 02: Transportation and the Economy b. 23 c. 52 d. 92 ANSWER: d POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 11. How much of ton-mile traffic in the U.S. is carried by air mode? a. 1% b. 4% c. 10% d. 15% ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 12. Which of the following costs would be affected by the transit time? a. Inventory b. Marketing c. Production d. Insurance ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 13. In terms of average household expenses, transportation is: a. First b. Second

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Chapter 02: Transportation and the Economy c. Third d. Last ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 14. Aggregate demand for transportation is __________, while demand for transportation on a price sensitive level is __________? a. elastic, elastic b. elastic, inelastic c. inelastic, inelastic d. inelastic, elastic ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 15. Which of the following refers to the consistency of transit times? a. Security b. Capability c. Reliability d. Accessibility ANSWER: c POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.5 - Discuss the impact that improved transportation has upon land values and economic development. 16. Improvements in transportation will usually cause land values to: a. increase. b. decrease.

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Chapter 02: Transportation and the Economy c. remain the same. d. commercialize. ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.5 - Discuss the impact that improved transportation has upon land values and economic development. 17. Which of the following is considered a non-economic transportation regulation area? a. Safety b. Large-scale Production c. Quality Utility d. Land ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.7 - Appreciate the function and scope of transportation in advanced and developed economies. 18. Which of the following is considered a transportation service characteristic? a. Land Values b. Time c. Reliability d. Place Utility ANSWER: c POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 19. Transportation is considered which type of demand? a. Derived b. Independent c. Primary

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Chapter 02: Transportation and the Economy d. Substitute ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 20. Average transportation expenditures are about what percentage of GDP in the U.S. in 2020? a. 1% b. 10% c. 16% d. 20% ANSWER: c POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 21. The Mississippi River is regarded as an important avenue for commerce in the U.S. because: a. it is a major transportation artery. b. its color is muddy. c. the river is small. d. the river floods often. ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: Up and Down with the Big Muddy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.1 - Understand the importance of transportation to the economic vitality of the United States and other countries and regions and why it is probably our most important industry. 22. What is the usual demand metric for freight? a. Passenger distance b. Ton-mile c. Freight to weight ratio d. Containers per mile

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Chapter 02: Transportation and the Economy ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 23. A useful analytical tool for the study of transportation is: a. Passenger-miles b. Deregulation c. Cass Freight index d. Modal split ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 24. The sensitivity of customers to changes in price is called: a. demand elasticity. b. inelasticity. c. fully landed cost. d. marginal cost. ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 25. Value of service considers the: a. role intramodal transport has on road networks. b. freight-to-weight ratio for rail shipping. c. impact of transportation costs and services on the demand for the product. d. impact of transportation costs only. ANSWER: c

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Chapter 02: Transportation and the Economy POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 26. Transportation provides what critical link in the global economy? ANSWER: Transportation provides the link between producers and consumers. POINTS: 1 DIFFICULTY: Easy REFERENCES: Transport Measurement Units QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 27. The investment by government in transportation infrastructure is frequently referred to as: ANSWER: Social Capital POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 28. How has the automobile impacted a person‘s lifestyle in the United States? ANSWER: The convenience, flexibility, and relatively low cost of automobile travel allow individuals to live in locations distant from where they work. POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 29. In addition to its economic role, what other roles are associated with transportation?

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Chapter 02: Transportation and the Economy ANSWER: Political, social, and national defense POINTS: 1 DIFFICULTY: Hard REFERENCES: Transport Measurement Units QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 30. What are the demand metrics for freight and for people? ANSWER: For freight, the usual demand metric is the ton-mile, and for people, the unit is the passenger-mile. POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 31. Explain the economic importance of transportation in a global economy. ANSWER: Transportation is considered the life support system of a civilization. Transportation systems have a major impact on population patterns and economic development. The lack of transportation infrastructure is considered one of the significant factors that has restrained economic development in many third world countries. From a daily living perspective, transportation is critical to supporting the tremendous resource requirements of the average U.S. citizen. For example, a city of 3 million people requires more than a million pounds of meat, poultry, fish, eggs, cheese, and beverages a day. In a global economy, transportation‘s role is critical because of these opportunities to import and export products and enhance this overall viability of many economies. POINTS: 1 DIFFICULTY: Medium REFERENCES: Economics of Transportation QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.2 - Appreciate the role and contributions of transportation systems to the economic development of countries or regions. 32. Explain how transportation can contribute to the economic value of a product. ANSWER: Transportation cost has an important impact on the level of demand that a commodity will have. As transportation costs increase, demand for a product will generally go down (this is especially true the more elastic the demand). For example, if a commodity cost $10 to

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Chapter 02: Transportation and the Economy purchase and people in a certain part of the country are willing to pay $12 for that commodity, it can only be sold if the transportation cost is less than $2 per unit. On the other hand, decreases in transportation cost can expand this market area and increase demand. POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.6 - Understand how transportation affects the price of goods, services, and market areas. 33. Explain time utility. ANSWER:

The concept of time utility is closely aligned to that of place utility. The demand for a particular commodity may only exist during certain periods of time. If a product arrives in a market at a time when there is no demand for it, then it possesses no value. For example, the demand for Halloween costumes exists during a specific time of the year. After Halloween passes, these goods cannot be sold because they have little or no value in the market. Effective transportation can create time utility by ensuring that products arrive at the proper locations when needed. POINTS: 1 DIFFICULTY: Medium REFERENCES: Historical Significance QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.4 - Appreciate the historical role of transportation from an economic, social, and political perspective. 34. Explain what economies of scale mean. ANSWER: Geographic specialization is complemented by large-scale production or economies of scale, which are the result of more efficient operations. However, without the use of efficient transportation networks, the advantages of scale economies, production efficiencies, and specialization could be lost. The raw materials for production need to be transported to a manufacturing facility, and the finished products must be transported out of an area at reasonable costs to markets and consumers at acceptable prices. Otherwise, the goods have no value. Geographic specialization assumes that the large-scale production of goods is demanded at different locations. Therefore, an area cannot rely upon its comparative advantage and large-scale production without the use of efficient transportation systems. The more efficient the transportation, the larger the potential market area and possibility of increased scale economies. POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Essay HAS VARIABLES: False

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Chapter 02: Transportation and the Economy STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.3 - Understand how transportation of goods and people impacts the social and political dimensions of an economy or region. 35. Explain the role and importance of the Mississippi River System. ANSWER: The Mississippi River has been an important avenue of commerce for several centuries in the United States. It has been referred to as the ―Big Muddy‖ by many individuals because of the color of the water and the amount of soil that washes down the river from northern states, especially during the spring, and is deposited in the so-called deltas near the Gulf of Mexico. POINTS: 1 DIFFICULTY: Medium REFERENCES: Up and Down with the Big Muddy QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.1 - Understand the importance of transportation to the economic vitality of the United States and other countries and regions and why it is probably our most important industry. 36. Explain the roles and importance of land values. ANSWER: Transportation improvements that enhance an area‘s economy also can increase the value of land that is adjacent to or served by the transport improvements because the land becomes more accessible and potentially more useful. Today, the suburban centers provide excellent examples of land areas that have increased in value due to the accessibility that results from efficient transportation systems or infrastructure. Suburbanites can take advantage of nearby city life for work and pleasure and then retire to rural areas via public transportation networks or highways to avoid crowded living conditions. Commuters from Greenwich, Connecticut, to New York City and from Cherry Hill, New Jersey, to Philadelphia all reap both city and suburban benefits as the result of reliable transportation systems. Consequently, the value of the land in the suburban areas has increased to reflect the advantageous lifestyles that the new or improved transportation systems have made possible. The land values within the city are obviously also enhanced by the economic development. POINTS: 1 DIFFICULTY: Medium REFERENCES: Transport Measurement Units QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: LO 2.5 - Discuss the impact that improved transportation has upon land values and economic development. 37. Explain modal split and its importance. ANSWER: Modal split is an analytical tool used to study and analyze the total transportation market for passenger and freight transport according to volume and mode. For passenger transportation, more than 77 percent of the passenger mile traffic is private highway traffic. Since 1970, air travel has decreased in relative cost, so air traffic passenger miles have increased, but are still relatively small. Looking at freight, intercity modal split is dominated by trucks. Since 1990,

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