Economics for Managers

This article discusses the recent economic status of Australia, focusing on the tourism industry and its contribution to the country's economy. It highlights the investments made in the tourism sector and the projected growth in tourism expenditure. The article also explores the market structure of the hospitality industry in Australia and the impact of taxes on buyers. Additionally, it examines the competitive advantage of tourism in Australia and the potential benefits and disadvantages of tourism for the country's economy. Lastly, it mentions the leading countries in the global tourism market, including the United States and France.

Ru8nning head: ECONOMICS FOR MANAGERS
Economics for managers
Name of the student
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Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................3
Answer 3....................................................................................................................................5
Answer 4....................................................................................................................................8
Reference list............................................................................................................................12

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Answer 1
The articled named The Tourism Investment Monitor analyzes the recent economic
status of Australia. It states about the contributors of the economy of Australia along with
other sectors that contributes to economic growth. Australia have experienced an economic
growth for the last two decades. The article “The Tourism Investment Monitor” shows the
values as well as the numbers of the large projects which have been invested in the Australian
tourism pipeline. An investment of about $37 billion have been made in the tourism
investment of Australia. The arts, recreation and the business services amounted to $17
billion. The infrastructure of the aviation projects amounted to ten million and the projects
valued at $10 million. It have been stated in the article that the Australian tourism is known to
be the standout performer of the Australian economy that provides an attractive environment
for the investors. Mostly the foreign investors of Australia known to strengthen the
investment pipeline of the projects. Huge amount of investments have been made in the
infrastructural projects, accommodation projects and on the business services. According to
the studies of the tourism forecasts is have been found out that the expenditure of the tourism
will be growing at the rate of 6% yearly in order to reach $224 billion by the year 2027
(Tra.gov.au. 2017). The rise in the growth of the visitors will create a demand for the airline
services, hotels and also for the educational institutions. A lot of investment in the tourism
industry of Australia will be needed during future for keeping the market in equilibrium. The
pipeline of the tourism investment have been designed for tracking the investments projects
which will be valued for more than $20 million. The accommodation investment will be
moving towards the mixed use projects which will be combining the tourism accommodation
with the other components of non-tourism. Among all the places, Victoria and Queensland
were known to be some of the popular places for the mixed used developments with the
availability of the projects. The World Investment Report of 2017of the United National

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Conference on Trade and Development states that Australia has received an amount of
US$48 billion as the inward foreign direct investment during the last year. The aviation
infrastructure in the year 2016-2017 was known to be worth of ten billion spreading across
the 19 projects. The aviation infrastructural projects includes the Perth International and
domestic terminal upgrades, Brisbane Airport domestic terminal expansion. It also comprise
of the Melbourne Airport construction of the third runaway. The projects that were known to
be under construction have been valued at $3.2 billion in 2017. The infrastructure of the
business services, arts and recreation will create a huge demand for tourism as there will be
increase in the number of events and major attractions. Out of $10 billion which have been
proposed for the aviation infrastructure in case of tourism, only $7 billion were used in the
infrastructures. The investments in the various kinds of infrastructures have been spread
across the various types of projects (Tra.gov.au. 2017). The pipelines of the arts and the
cultural facilities costed to $3 billion for more than fifteen projects. However, the major
tourist attraction comprised of the nine projects which had a total value of $2 billion.

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Answer 2
Figure 1Tax on buyers
The question states that the hospitality industry of Australia have the market structure
of the perfect competition. When the market structure is perfectly competitive in nature there
will be large number of buyers as well as large number of sellers in the market. The product
that is sold in a perfect competitive market is most of the cases homogeneous in nature at the
market prevailing prices. The market of the perfect competition includes both the productive
efficiency as well as the allocative efficiency. The perfect competitive markets are not very
efficient during the period of short run since the output will not take place when the marginal
cost and the average cost will be same. The demand curve of the consumers will shift down
when the government levying taxes on the buyers instead on the sellers, and the demand
curve will shift down exactly to the left at the rate of the tax imposed. The equilibrium points
will be shifting from E1 to E2 after the tax is imposed by the government (Bac, Bugnar and
Mester 2015). The quantity demanded by the consumers will change and will decrease from
the point of Q1 to Q2. Taxes are generally known as the contributions which are made by the

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businessman in order to support the governments of that particular region. As according to
the question, tax had been imposed on the buyers, most of the consequences will be faced by
the buyers. In this case the surplus of the producer will be the benefit which the producer
will be gaining from producing the commodities at a given price. taxation can also lead to
dead weight loss which is known as the cost to the society when suppliers and buyers leave
the market as a result of tax cost. With the increase in tax, there will be fall in the producer
surplus. As the taxation structure increases, the producer surplus will also be going down.
The tax levied on the consumers will be same as the tax levied on the sellers because the
reduction in the quantity sold will be quite equal with the rise in tax.
The deadweight loss is the reduction of both the consumer and the producer surplus which
results as result of imposition of tax which can be termed as the economic inefficiency.
Taxation usually leads to the welfare loss which is also the decrease of the well being of the
economy. The burden of tax leads to fall in the employment level, labor wages and also living
conditions. It leads to fall in the economic well being which can be termed as the dead weight
loss (Chai, Hardy and Tinch 2017). The social welfare therefore can be stated as the addition
of the producer surplus along with the consumer surplus with the tax revenue which has been
collected by the government. The social welfare also results from the consumption and
production of the particular amount of the good or services consumed.
The revenue of the tax is the amount of income which have been derived from the
government with the help of taxation. With the rise in tax, the revenue of the tax will also go
up. Taxation is also the primary source of income for a particular place which can be taken
from various sources of the public enterprises and trade royalties. Increase in the taxation rate
also leads to rise in the government revenue. the growth will lead to rise in tax which will in
term lead to higher revenue during the long term. It can be said that an increase in taxation
can result to increase in the government.

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Answer 3
Figure 2Investment and economic growth
The is a huge competitive advantage of tourism in case of Australia through proximity to
Asia as a result of low cost airlines. Both the tourism and travel are known as the important
economic activity of Australia as it is present in almost most of the countries around the
world. The consequences will be having both direct as well as the indirect relationship. For
this result Australia will be required large amount of investments in the infrastructure of the
tourism for the growth of the global economy with the regional tourism market. It is therefore
required to invest a lot money so that the tourism boom continues for longer period of time.
According to the recent research it have been fond out that more than eight million
international tourist have visited this particular place in the year 2017. Tourism can be
defined as the act of balancing that is present between the demand creation and which also
ensures supply of the development as well as the investment incentives in order to develop
accommodation. The government of Australia therefore should be investing huge resources
for promotion of the careers in tourism as well as the training at both the vocational and
education levels. Tourism has both advantage and disadvantages for the Australian economy.
As tourism is advantageous to the economy, it is usually promoted every year in both the
developing as well as in the developed countries.

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As travel and tourism both are the important parts of the Australian economy, this particular
sector will be contributing to more than three percent of the gross domestic product of
Australia. The tourism will also employ more than five million people from all around the
world. The experts believes that the Australian tourism will be having a great potential of the
growth despite the various kind of the economic instability of the world. As the mining
sectors of Australia are have been not doing well, tourism will help in preventing the
Australian economy from going in to the recessions.
Approving the destinations of the Chinese tourists can also help in benefitting the tourism
industry of Australia. One of the biggest source of the inbound tourists of Australia are the
Chinese tourists. The relationship between the Chinese tourists and Australia strengthened in
the year 214 when both of them agreed to signed The Free Trade Agreement. Millions of
Chinese tourists had known to visit Australia in 2016 and therefore it is expected for growing
more. Therefore the Chinese tourists is likely to benefit Australia for about $9 billion by
2020.
Tourism can also bring about a lot of incentives to Australia. Therefore, it can be said that
tourism can also help in providing a lot of incentives for the places for reservations,
regenerations. It will also upkeep both the wildlife as well as the urban areas. Visitors will
help in promotion of the international links which will also provide cultural and business
connections in both medium and long term benefits. As there will be rise in tourism, it will
help in increase the profile of the place. Tourism will also give the locality a chance to show
itself to the outer world. Tourism can also help in providing various jobs for the locals, bars,
hotels , transport and to the restaurants which will need a lot of staffing and it will be help in
proving the much needed enjoyment for the people.
Although, there is a presence of lot of disadvantage of tourism which are:

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 Damage which are caused to the environment: the ride in the level of tourism in
Australia will be leading to various environmental damage such as various kinds of
pollution along with the forest fires. Most of the paces which consists of the
monuments, beaches have a hard time for coping with the huge number of tourists as
they suffer from various wear and tear of the damage. The tourist activities which
includes hiking, trekking, scuba diving, bird watching and various other kinds of
activities will be negatively affecting the local ecology of the place.
 The jobs of the tourism are mostly seasonal in nature and are quite insecure with no
extra benefits like the health care facilities or the sick payments. Some of the places
may be also inundates where the visitors will be present in the peak period and then
also remain deserted for about several months. It can also be said that there will be
presence of many kinds of negative effects of tourism where with the increase in
population, the resource will become unsustainable in nature and can also become
exhausted in nature. The negative impacts of the increased tourism are known to be
present n the development stage of the tourism area life cycle where there will be
presence of imbalance.
Answer 4
The name of the countries which are known to be the leaders of the global tourism
market are France, United States and Spain
The United States of America
The tourism industry of America is known as the huge industry serving millions of
international as well as domestic industries every year. There is a presence of huge range of
attractions in America which includes the golf courses, amusement parks, landmarks and
various historical buildings along with different kind of spas and outdoor recreations. 2when

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the US President Donald Trump was elected the rate of tourists coming to America declined.
At that time the rate of tourism in America declined to 4% (Tran, Turner and Jo 2018). The
recent studies shows that New York had been the favorite destination for majority of the
tourists in the United States and the tourists also spends a large amount every year in the
different places in America. Tourists usually visits America to get the beautiful view of the
landmarks, natural wonders, entertainment venues of the various cities. However, after the
attack in 2001, most of the sectors in the economy were highly affected. It have also been
found out that the air travel have contributed a huge amount to the tourism industry of the
United States.
France
Tourism is one of the significant sectors in France because of its beautiful landmarks,
renowned museums and the largest monuments of the world. The tourism of France have
contributed more than seventy billion euros to the gross domestic product of the country
where most of the amount comes from the foreign visitors. Huge number of tourists came
from Europe, Switzerland, china, and the United States of America. Majority of the visitors
generally likes to visit Paris which is the capital city and is one of the most visited places in
the world. It will have some of the renowned and the largest museums and landmarks in the
world. The reason behind this is that France is one those countries which will be having very
well developed rural tourism which will be having huge economic profit to the country as
well as in the rural areas. France is also known to have more than thirty seven sites inscribed
in the UNESCO’s world Heritage List which also includes the various cities as well as
various sites which are of high cultural interest. Some of the major tourist attractions of
France consist of the ski resorts, beaches, seaside and rural regions. The place named French
Rivera known to have received millions of tourists all round the year. For this reason, it is
said to be the one of the major tourist destinations of the world. The famous cities of this

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particular place are Nice, Cannes, Antibes and Cap Ferret which are some of the popular
destinations.
Spain
The tourism of Spain contributes to most of the economic life which will be coming
after the contribution of the banking sectors to the gross domestic product of the country. It is
also known as one of the famous destinations for the summer holidays where a large number
of tourists visits from France, Germany, Italy and America. It have been found out that the
foreign tourism industry is a famous industry all throughout the world. Therefore it can be
said that Spain is one of the popular destinations for summer holidays. Majority of the
people’s favorite destination is The Costa Blanca which is visited by the most of tourists from
Germany and the United Kingdom (Tran., Turner and Jo 2018). The large number of festivals
which are ce3lebrated all throughout the year ar4e some of the major attractions in Spain. The
name of the mainland coasts include Costa Brava, The Costa Daurade which are known to
have received more than 10 million visitors throughout 2017. Some of the most popular
destination of Spain includes Balearic Islands and the Canary Islands. Another popular
destination are the cities of Madrid and Barcelona where every year millions of visitors visit
Spain every year. Spain had also been ranked first in the biannual Travel and Tourism
Competitiveness Index published by the World Economic Forum in 2017. Spain is therefore
known to be the most visited countries in the world where more than eighty million tourist
have visited.
With the increase in the competition and rise in the Australian dollar, the tourism industry of
Australia is quite negatively affected. Although tourism is known as the significant industry
generating more than ninety billion to the gross domestic product of Australia. The market

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shares are therefore known to decline for quite a long period of time. The ways through
which the Australian tourism can be increased are:
1. The tourism industry productivity of Australia is known to be quite low when it is
compared to the rest of the Australian economy. It will be limiting the operators of the
Australian tourism or providing the value of the money experiences. For this reason
the government should be building on the competitive advantage of the country which
will be working for increase in the productivity, innovation and quality. Therefore
government should be building on the industry resilience, productivity and quality.
2. Another significant factor which are needed for promoting tourism in Australia is the
requirement of strong digital capability which are required for marketing and
distribution of the products. Therefore, the government should be investing a lot of
money for building the competitive digital capability. The government as well as the
tourism industry should be working to ensure that the tourism enterprises should be
taking advantage of the online services.
3. The Australian government should be investing for brining tourists from the Asia
countries as it will be acting as a huge opportunity in the industry. For this reason the
industry of tourism should be strengthening the distribution, developing marketing
campaigns and also strengthen distribution in order to attract tourists from the Asian
countries.

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