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Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
02 Jan 2016, 07:48
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The following appeared as part of an article in the travel section of a newspaper, :
"Over the past decade, the restaurant industry in the country of Speissa has experienced unprecedented growth. This surge can be expected to continue in the coming years, fueled by recent social changes: personal incomes are rising, more leisure time is available single person households are more common, and people have a greater interest in gourmet foods, as evidenced by a proliferation of publications on the subject"
Discuss how well reasoned...
The argument that the causes of the growth in the restaurant industry are social are misleading and vague. The author applies very shallow reasoning as to the growth by stating that personal incomes are rising, more leisure time is available and single person households are more common. The author should have discussed the underlying macroeconomic reasons for the growth instead.
First, the personal income rising could be attributed to low unemployment rates. Now this would have been a better measure by comparing what the unemployment rate was prior to the past decade with a discussion on the availability of disposable income. The disposable income allows households to spend more on nonessential items such as eating out in restaurants.
Second, the author would have highlight that inflation is under control. For example, the prices of food are affordable to restaurants and thus the higher gross margin allows these business to expand.
Third, the availability of capital to restaurant owners due to low interest rates would lead to restaurant owners growth and expansion of their businesses.
The leisure time available and single person households are not macroeconomic reasons for the anticipated surge in the restaurant business. In fact it would be counter intuitive because single person household may have limited income. In addition, more leisure time would allow households time to prepare gourmet foods at home, which is probably why there is a proliferation in the publications on the subject.
Ergo, the author should have tied the surge in the restaurant business to macroeconomic factors. The personal income rising, leisure time available and single person households does not justify the surge. The prediction for the surge should be based on solid macroeconomic reasons such as unemployment rates, inflation and low interest rates.
"Over the past decade, the restaurant industry in the country of Speissa has experienced unprecedented growth. This surge can be expected to continue in the coming years, fueled by recent social changes: personal incomes are rising, more leisure time is available single person households are more common, and people have a greater interest in gourmet foods, as evidenced by a proliferation of publications on the subject"
Discuss how well reasoned...
The argument that the causes of the growth in the restaurant industry are social are misleading and vague. The author applies very shallow reasoning as to the growth by stating that personal incomes are rising, more leisure time is available and single person households are more common. The author should have discussed the underlying macroeconomic reasons for the growth instead.
First, the personal income rising could be attributed to low unemployment rates. Now this would have been a better measure by comparing what the unemployment rate was prior to the past decade with a discussion on the availability of disposable income. The disposable income allows households to spend more on nonessential items such as eating out in restaurants.
Second, the author would have highlight that inflation is under control. For example, the prices of food are affordable to restaurants and thus the higher gross margin allows these business to expand.
Third, the availability of capital to restaurant owners due to low interest rates would lead to restaurant owners growth and expansion of their businesses.
The leisure time available and single person households are not macroeconomic reasons for the anticipated surge in the restaurant business. In fact it would be counter intuitive because single person household may have limited income. In addition, more leisure time would allow households time to prepare gourmet foods at home, which is probably why there is a proliferation in the publications on the subject.
Ergo, the author should have tied the surge in the restaurant business to macroeconomic factors. The personal income rising, leisure time available and single person households does not justify the surge. The prediction for the surge should be based on solid macroeconomic reasons such as unemployment rates, inflation and low interest rates.
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