Posted: August 15th, 2015
In your own words, summarize the article, “Tourism Investment Monitor,” by Tourism Research
Australia, May 2015. In particular, what are the main messages of the article? [Hint: Please link your
summary with relevant economic theories wherever you can.
Question 2: (8 marks)
Use appropriate diagrams to answer: Do you think increasing investment in Australian tourism industry
is a prudent economic policy for the future sustainaTourism Investment Monitorbility? Why or why not? [Hint: Please do an
extensive literature review to find out the pros and cons of the global tourism industry, their short term
and long term impacts, etc.
Question 3: (8 marks)
Suppose that the Australia’s hospitality industry is perfectly competitive (i.e., many hotel and/or
accommodation providers). The federal government decides to levy a buyer’s tax (specific tax) on hotel
accommodations. Use appropriate diagrams to answer:
(a) Examine the impacts of this buyer’s tax on the equilibrium rental prices, consumer surplus,
producer surplus, and total surplus (or social welfare).
(b) Can an increase in the buyer’s tax raise social welfare?
(c) Can an increase in the buyer’s tax raise the federal government’s revenue?
Question 4: (8 marks)
Suppose that the tourism department’s prediction of increased tourism activities and investment has
been proved right. Use appropriate diagrams to answer [Hint: Let’s assume the labor market in tourism
industry is perfectly competitive]:
(a) What should be the new wage level in the tourism industry?
(b) If due to huge union pressure, the government sets minimum wage above this
equilibrium wage, what should be the consequence? What would happen to social
Question 5: (8 marks)
Find three other countries or economies who are among the leaders in global tourism market. Give a
brief description about their tourism industries [Hint: If possible present concrete fact and figures].
Provide your views or suggestions on the best measure to promote Australian as a highly sought
tourism destination based on your research on the above three tourism based successful economies.
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