Chapt' 10 Econ

1
Chapt. 10 Econ Politics

• Chamber Director Headache 1456!
• Should Maria go out of the city for Ads?
• Economics
• the social science that seeks to understand the
  choices people make in using their scarce
  resources to meet their wants
• Estimating Tourism Activity
• of visitors times spent per visitor

2
Economic Principles

• Comparative Advantage
• yields higher returns than other industries
• Occurs when
• The area is especially appealing (super/infrastr)
• If there are no other alternatives
• Opportunity Costs
• What you give up, for what you purchase
• you need to maximize return
• Effect of Exchange Rates (ehh?)

3
Multiplier Effect

• Tourism as an export/import
• Adds to 1 economy, deducts from another
• we desire International visitors
• Output multiplier effect (Figure 10.1)
• When new is re-spent in local economy
• Leakage that leaves the economy
• Canada 2.5 Iceland .64

4
Economic Benefits of Tourism

• Tourism s are stable
• Even in recession, people travel
• Economic Diversity (all job levels)
• Economic incentive to improve
• Infrastructure/Superstructure
• Encourages Entrepreneurial Activity

5
Potential Negatives of Tourism

• Over-dependence lack of diversity
• Can hurt the resources that attract!
• Increases local cost of living
• Police, housing, sewage, etc.
• Cost-Benefit Analysis
• Assigning values to benefits/costs of tourism

6
Economic Impact Analysis

• Economic Impact
• Direct Indirect Induced expenditures
• Direct money spent in region
• Indirect next rounds of spending
• Induced Employee spending wage/tips
• Leakage money that leaves the region