Read the summary and the most important questions on Economy

• 1 Introduction

• 1.1 Characteristics of the hospitality industry

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• Services that target Business consumers = MICE- IndustryWhat is MICE?

  Meetings
  Incentives
  Conferences
  Exhibitions

• Focus on the performance of an economy as a whole, and the factors that may lead to changes in its performance and sustainable growth over time

  Macroeconomics

• Focus on choices made by individual consumers and producers, and the interactions in the markets that give them the most benefits

  Microeconomics

• Exercise 1.2Given:GDP 2018 = € 385 billionGDP 2019 = € 400 billionInflation 2019: 3% QuestionNominal economic growth rate  2019?Real economic growth rate  2019?

  Nominal economic growth rate 
  ((400 billion - 385 billion) / 385 billion ) * 100  = 3,896 = 3,9%
  
  Real economic growth rate
  
  400 billion/1,03 = 3,88, 35 billion
  
  ((388,35 billion - 385 billion) / 385) * 100 = 0,87%

• 3 Economics attrivutes of consumer and firms

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• Economic concepts of demand and supplyWhy?

  • To explore consumption and production behaviour

• Law of dismissing marginal utility

  The cheaper units become, the more consumers will want to buy
  The more units you possess, the less useful the next unit   becomes.  

• Lower price ->Income effect:Substitution effect:

  Income effect: You buy more
  
  Substitution effect: you buy an equal amount and use the rest of the money for something else

• Quantity also determined by non – price factors: 

  
  –Income
  –Taste
  –Price of different products (substitutes and complements)
  –Expected changes in income
  –Expected changes in price
  –Time (especially in hospitality services)

• Major non-price determinants of supplyy

  • Cost of production
  • Technology
  • Public policy: An essential determinant of supply of hospitality services

• Supply surplus whenSupply shortage when

  (Qd - Qs)
  
  Supply surplus when Qs > Qd
  Supply shortage when Qs < Qd
  (government sometimes pays surplus)