South-Western College Publishing - Economics  
No One Wants to Visit the US
Topic Supply and Demand
Key Words VISA, travel, demand,
Full Article

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Reference ID: A159042311

News Story Since 2000, the number of travelers to the US (excluding Canada and Mexico) has fallen by one-sixth. Further, despite a weak dollar, travel from Western Europe has fallen by 3% last year. Why? No one wants the hassle of coming here.

Since 9/11, requirements for entry into the United States have become more stringent. It can take up to six months to receive a visa for travel into the US. Businesses are moaning that they are unable to bring in talented foreign labor. In fact, the entry procedure into the US and friendliness of officials upon entry into the US caused it to score more than twice as badly as the next region (the Middle East) by travelers last year.

Politicians are stepping into the fray. Proposals call for increasing the number of visa-processing staff to reduce the wait time for approval. It also proposes extending visa-waiver rights to a greater number of countries - only 27 of them have such rights now - in exchange for additional information on the travelers. Other proposals involve increasing the number of staff at busy international airports in the US. Of the 20 busiest in the US, more than half of those indicate being understaffed by at least 20%.

Interestingly, the folks at Disney offered their assistance in increasing efficiency with the queues at airports, but the Homeland Security rejected that call.

Of course, once the wait time has fallen, then the task will simply be to win back all of the travelers who have decided that it's just not worth their time visiting the US.

Questions
Discussion Questions:
1. How is opportunity cost used in this article?
2. Consider the proposals suggested by politicians. Assuming that they are implemented as they are written in the summary, will foreign travel increase again?
Multiple Choice/True False Questions:
1. According to the article, what has happened to the market for visas for entry into the US?
  1. Demand by foreign travelers has fallen.
  2. Demand by foreign travelers has risen.
  3. Supply by US consulates has risen.
  4. Supply by US consulates has not changed.
2. True/False. Increasing the visa-processing staff will reduce the implicit costs of receiving a visa.

3. A weak dollar relative to the Euro should have caused more travelers to want to come to the US, and yet travel fell by 3%. Why?
  1. Opportunity cost of waiting for a visa was too high.
  2. Special deals were occurring for travel into other countries.
  3. Many other countries were less friendly than the US upon entry.
  4. None of the above.
Source "Keeping out More Than Terrorists." The Economist. February 8, 2007.
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