Deck 4: Tourism Economics

Question 1

This method determines the net effects of the tourism sector:

A) measuring income elasticity.
B) structural analysis.
C) multiplier effect.
D) input-output analysis.
E) cost/benefit analysis.

Answer 1

E

Question 2

A macroeconomic approach from a national or region's perspective does not examines tourism's effects on:

A) foreign exchange.
B) income.
C) businesses' cash flow.
D) national or regional employment.

Answer 2

C

Question 3

This is a strategy for minimizing leakage from a destination's economy.

A) factors of production
B) import substitution
C) demonstration effect
D) transfer pricing
E) income elasticity of demand

Answer 3

B

Question 4

For tourism demand, variables capable of shifting the entire demand curve inward or outward include the following:

A) the season.
B) prices of rooms in other locations.
C) transportation to the destination (price, ease).
D) all of the above
E) A and C only

Question 5

A nation's balance of payments is the record of all economic transactions between its residents and the rest of the world. It includes the following except:

A) the current account.
B) the capital account.
C) the gross domestic account.
D) the financial account.

Question 6

Negative impacts of tourism may occur when there is:

A) adaptation to tourist demands.
B) change or loss of indigenous identity.
C) loss of values resulting from standardization.
D) loss of authenticity or staged authenticity.
E) all of the above

Question 7

The tourism income is impacted by the following factors except:

A) foreign exchange earnings.
B) leakage.
C) tourism satellite account.
D) balance of payments.
E) multiplier effect.

Question 8

The tourism demand depends on such factors as the following except:

A) the consumers' preferences.
B) the prices of related tourism goods and services.
C) the consumers' home residence.
D) the number of consumers.
E) the consumers' income.

Question 9

What is the uniqueness of tourism multiplier effect?

A) It measures the "fresh" or new dollars that enter a local economy.
B) Tourism jobs require little training.
C) Tourism is usually the largest employer in many community.
D) It is easy to count tourism dollars.

Question 10

The three major economic impacts of tourism are:

A) invisible exports, balance of payments, and economic growth.
B) foreign exchange earnings, land speculation, and import substitution.
C) employment, income, and foreign exchange earnings.
D) cultural facilities, infrastructure, and employment.
E) income, demonstration effect, and multiplier.

Question 11

This is not the basis on which the economics of tourism is studied:

A) how to make the best possible use of resources.
B) human beings' wants and decisions to travel.
C) the increased productivity due to specialization.
D) tourism supply and demand.

Question 12

The elasticity is the ratio of the percentage change in the quantity divided by the percentage change in the price. Which of the following statement(s) is true about elasticity?

A) The bigger the percentage change in quantity relative to the percentage change in price, the more elastic is demand.
B) When quantity changes by more than price, the demand is said to be inelastic.
C) When price changes by more than quantity, the demand is said to be elastic.
D) When quantity changes by more than price, the demand is said to be elastic.
E) both A and D

Question 13

This approach is a key to achieving an acceptable balance between the positive and negative impacts of tourism.

A) carrying capacity
B) cultural clashes
C) cost-benefit analysis
D) sustainable tourism development
E) economies of scale

Question 14

Adam Smith stated in his book The Wealth of Nations the concepts of:

A) the invisible hand that guides resource to where they have the highest value.
B) aggregate supply and demand.
C) the increased productivity due to specialization.
D) A and B
E) A, B, and C

Question 15

This is not a negative social impact of tourism.

A) loss of cultural authenticity
B) encouragement of urbanization and emigration
C) commercialization of traditional welcome and hospitality custom
D) increase in health risk
E) keeping local culture and traditions alive

Question 16

This economics technique measures the amount of local income per unit of visitor expenditure.

A) the demonstration effect
B) the multiplier effect
C) cost benefit analysis
D) satellite national accounting
E) structural analysis

Question 17

The great benefit of Tourism Satellite Account (TSA) is:

A) it is easy to collect data and calculate TSA.
B) it allows for comparisons between regions, countries, or groups of countries.
C) it measures the opportunity cost of tourism development projects.
D) it measures the interactions among industries.

Question 18

The following statement about elasticity is not true.

A) Business travelers have a more inelastic demand than leisure travelers.
B) Luxury goods have a more inelastic demand than do necessities.
C) Luxury goods have a more elastic demand than do necessities.
D) Leisure travelers have a more elastic demand than business travelers.

Question 19

These are the three levels of income generated by tourism.

A) employment, imports, and exports
B) currency, capital, and exports
C) direct, indirect, and induced
D) local, domestic, and foreign
E) personal, corporate, and tax

Question 20

One of the potential positive environmental impacts of tourism is:

A) changes of land use.
B) greater protection of specific ecosystems.
C) cultural clashes.
D) increase in the multiplier effect.

Question 21

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
The gross domestic product (GDP)

Question 22

The law of demand indicates that price and quantity demanded are inversely related:

A) when price increases, the quantity decreases.
B) when price increases, the quantity demanded decreases.
C) when price decreases, the demand decreases.
D) when prices decreases, the quantity increases.

Question 23

These related goods and services are substitutes of each other when:

A) the price of one increases, the demand for the other goods is constant.
B) the price of one decreases, the demand for the other increases.
C) the price of one increases, the demand for the other goods increases.
D) the price of one increases, the demand for the other goods decreases.

Question 24

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
The income elasticity

Question 25

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
Tourism satellite account

Question 26

The microeconomics of tourism is concerned with the following except:

A) tourism's effect on national employment and income.
B) studies of individual sectors such as restaurants and hotels, etc.
C) competition.
D) individual consumers.
E) cross elasticity of demand.

Question 27

The following statement is true in related to the role of disposable income in tourism demand.

A) A normal good's demand increases when income decreases.
B) The demand for inferior goods increases as income increases.
C) A luxury goods refers to when demand changes by less than income changes.
D) A necessity good refers to when demand changes by less than income changes.

Question 28

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
Opportunity cost

Question 29

These related goods and services are complementary when:

A) the price of one increases, the demand for the other goods is constant.
B) the price of one decreases, the demand for the other goods decreases.
C) the price of one decreases, the demand for the other increases.
D) the price of one increases, the demand for the other goods increases.

Question 30

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
Import propensity

Question 31

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
Transient occupancy tax (TOT)

Question 32

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
Revenue management

Question 33

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
Cross-price elasticity

Question 34

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
Equilibrium

Question 35

MATCHING. Choose the item in column 2 that best matches each item in column 1.
Match the term with the correct description.

A) The bed tax
B) The measures that tells how sensitive demand is for one good or service to changes in the price of a related good or service
C) The ripple effect
D) A set of "accounting" rules to measure the economic contributions of tourism as an industry
E) The state of pricing at which quantity demanded equals quantity supplied
F) The cost of a resource is its value in its next best use
G) The measures that tells how sensitive demand is to changes in income
H) The total value of goods and services produced in a nation
I) A variation pricing based on demand
J) A leakage from a destination area
Multiplier effect