Part 1

Effect of transport mode on commodity value and distance from market Be sure to carefully consult the Appendix to this homework and the Powerpoint presented in class regarding proper graphing design while completing this problem. The value of products at the point of production tends to be different than their value at the market. An example of this is shown in Table 1, which represents the estimated value per ton of corn and wheat at the point of their production as a function of the distance from a market in the 19th century.

Table 3. Early estimates of the value (per ton) of wheat and corn at different distances from market at points along a railroad compared to along an ordinary road (adapted from Locklin 1972).

What do the results indicate and what is your conclusion about the potential market area for each product when transported by railroad or ordinary road?

Part 2

Consider why the products have different value as a function of increasing distance from market and use your spreadsheet to develop two additional tables as follows:

Table 2. The apparent total transportation cost per ton for each product transported via railroad and ordinary road as a function of distance from market.

Table 3. The transportation cost per ton-mile for each product transported via railroad and ordinary road as a function of distance from market.

6A) Using the data from your Table 3, prepare another graph (Figure 2) showing distance from market vs. estimated cost per ton-mile in mills (1 mill = 1/1000th dollar), again all four datasets should be presented on the same graph.

6B) What is the most obvious result of your analysis

6C) Within each mode, is the cost per ton-mile consistent for the two products, irrespective of distance?

Your two graphs (Figures 1 & 2) should have the basic layout shown below. Plot the ordinary road and rail data for each commodity on the same graph to enable comparison of the results.

Table 3. Early estimates of the value (per ton) of wheat and corn at different distances from market at points along a railroad compared to along an ordinary road (adapted from Locklin 1972). Miles from Market Figure 1 n Figure 2 Table 3. Early estimates of the value (per ton) of wheat and corn at different distances from market at points along a railroad compared to along an ordinary road (adapted from Locklin 1972). Miles from Market Figure 1 n Figure 2