Supply & Demand
What do we call the relationship between the quantity of an item and the quantity consumers are willing to purchase?
Supply and demand
What is economic impact?
The net change in an economy resulting from event-related activity
What are direct effects in the context of economic impact?
The initial purchases made by visitors to attend an event
What are indirect effects?
The ripple effects of additional spending after direct effects
What is a common method used to measure economic impact?
An economic impact study
How do supply and demand affect the price you pay for a product or service?
They determine the price based on the quantity supplied and the quantity demanded.
What factors contribute to economic impact around an event?
Development of facilities, visitor spending, employment opportunities, and taxes.
Give an example of a direct effect when a large event is held in a city.
Increased hotel bookings from event attendees.
How do businesses benefit from indirect effects?
They increase spending at other local businesses as a result of initial purchases.
Who typically conducts economic impact studies?
Sports leagues and organizations aiming to attract events to communities.
What happens to prices surrounding major events like a music festival when demand increases?
Prices typically increase due to higher demand for limited resources.
What is the primary focus of an economic impact study?
To determine the financial implications an event has on a market or region.
How are direct effects measured?
Through transactions between visitors (outside economy) and local businesses (inside economy).
Describe a scenario illustrating indirect effects during a major sporting event.
A local restaurant experiences increased sales, leading to them ordering more supplies from a local supplier.
Why is it important to conduct both pre-event and post-event studies?
To compare the economic changes and assess the event's overall impact.
What is the term for the overall effect on prices when both supply and demand fluctuate?
Market equilibrium
How do sports and entertainment impact local economies?
Through event impact, venue impact, industry segment impact, and superstar effects.
Why are local hotels and restaurants significant in studying direct effects?
They are the primary beneficiaries of initial visitor spending.
Why are indirect effects often more challenging to quantify than direct effects?
They involve multiple rounds of spending and business transactions.
What kind of data is collected during an economic impact study?
Data on visitor spending, employment changes, and local business transactions.
Describe how an increase in supply can affect consumer prices.
Increased supply can lead to lower prices if demand remains constant.
Why are both pre-event and post-event studies important in measuring economic impact?
They help to assess the overall economic changes caused by the event.
What role do spectators play in direct effects?
They contribute to direct effects through their purchases at events and local businesses.
How might indirect effects contribute to a community’s long-term economic growth?
By fostering stronger business relationships and increasing local employment opportunities.
What is the significance of the “superstar effect” in economic impact studies?
It highlights how high-profile events or individuals can disproportionately influence local economies.