Paper 1 Practice: Meridia’s Urban-Mobility Decision
Original practice material
Meridia and all evidence are fictional. This is one 30-mark case study, not a complete Paper 1. Suggested time: 75 minutes.
Answers: Meridia’s Urban-Mobility Decision — Answers.
Case Study: Fares, congestion and capacity
Extract 1: A six-month fare trial
Meridia reduced off-peak metro fares from M2.50 to M2.00. Average weekday off-peak journeys rose from 400 000 to 440 000. A passenger survey found that 48% of additional journeys had previously been made by bus, 17% by car, 20% were new journeys and the remainder came from walking or cycling. Survey participation was voluntary.
The survey was advertised through the metro app and received 3,200 responses. It did not include non-users and respondents were not selected randomly. The trial began at the same time as two large employers introduced flexible working hours. No comparable city without a fare change was studied, so the before-and-after evidence cannot isolate every cause of the ridership increase.
Extract 2: Mixed outcomes
Off-peak road speeds increased slightly, but peak congestion did not change. Metro crowding rose on two lines because maintenance had reduced available trains. Shops near stations reported more customers, while bus operators lost revenue. Low-income shift workers welcomed lower fares; residents without convenient metro access received little direct benefit.
Table 1: Selected indicators before and during the trial
| Indicator | Before trial | During trial |
|---|---|---|
| Average off-peak road speed (km/h) | 31.4 | 31.9 |
| Average peak road speed (km/h) | 18.2 | 18.1 |
| Off-peak crowding index on the two affected lines | 72 | 86 |
| Monthly public subsidy cost (M million) | 0 | 6.5 |
The crowding index is an operator measure in which a larger number indicates less passenger space. Road speeds are affected by roadworks, weather and school holidays as well as traffic volume. The station-shop report covers only businesses that answered a voluntary trade-association survey.
Extract 3: Alternatives
Officials are comparing a permanent fare subsidy, peak-period road pricing, extra metro capacity and more frequent feeder buses. Road pricing can target congestion but requires monitoring equipment and may burden drivers without alternatives. Capacity takes three years to deliver. The transport budget cannot finance every option, and funds have alternative uses in housing and healthcare.
The transport agency estimates that road-pricing equipment would take one year to install. Revenue could fund feeder buses, but charges might divert traffic into unpriced neighbourhood roads. Extra trains would relieve crowding and make mode switching easier, yet construction and operating costs are uncertain. Targeted fare support for low-income workers would cost less than a universal subsidy but requires an eligibility system.
Extract 4: Claims made in debate
One minister stated, “Journeys increased after fares fell, so the fare cut caused every additional journey and clearly solved congestion.” An analyst replied that the evidence supported a more limited conclusion and that policy should be ranked against explicit objectives.
The cabinet has not agreed whether the primary objective is affordability, lower peak congestion, lower emissions or broader access to employment. A policy can therefore perform well against one criterion and poorly against another. The analyst recommends publishing a decision matrix, collecting representative passenger data and distinguishing short-run trial outcomes from the effect of later capacity expansion.
Questions
(a) With reference to Extract 1:
(i) Calculate the price elasticity of demand for off-peak metro journeys using the original-value method. [2]
(ii) State what the survey suggests about the number of additional journeys that replaced car trips. [2]
(b) Explain one limitation of the minister’s inference in Extract 4. [4]
(c) Explain why the fare subsidy may create both benefits and costs for different stakeholders. [4]
(d) Assess whether the evidence shows that the trial was successful. [8]
(e) Discuss which transport policy, or combination of policies, Meridia should adopt. [10]
[Total: 30]