Notes, summaries, assignments, exams, and exercises for Economics for Baccalaureate

Predatory Pricing in Oligopolies

Oligopolists may use predatory pricing to force rivals out of the market. This strategy involves keeping prices artificially low, often below the full cost of production.

Understanding the Demand Curve

Demand Definition

Demand is defined as the quantity of a product or service that a consumer is ready to buy at various prices over a period. The Demand Curve is a graph indicating the quantity demanded by the consumer at different prices.

The demand curve is downward sloping from left to right, depicting an inverse relationship between the price of the product and the quantity demanded.

Movement vs. Shift in Demand Curve

• The movement in the demand curve occurs due to a change in the price of the commodity.
• The shift in

Comprar por Internet: Ventajas

No need to queue to buy.

Access to stores and products in remote locations.

It is possible to offer and find a lot of options.

Online stores are available every day at all hours.

Reduction of personnel expenses.

No need to handle cash.

Desventajas

Lack of communication and personal relationship.

Impossibility to try the product before buying it.

It is necessary to have a secure Internet connection.

It is essential to have a device from which to connect to the Internet.

Fear of fraudulent payments, scams, and theft of personal information (hackers).

Difficulty or even inability to detect scams and scammers.

Absolute dependence on the Internet.

Discomfort for returns.

Conclusion

The advantages of buying online outweigh the disadvantages,...

Stakeholders in Business

Owners and Stockholders

• Have a monetary or nonmonetary interest in an organization or entity.
• Look for high profit, dividend, and long-term growth, as well as a positive corporate image.
• Example: Mr. XYZ is an owner of company ABC and expects a financial return.

Suppliers

• Companies build a number of small, loyal relationships with suppliers and associates.
• This enables each business to develop shared goals, visions, and strategies.
• Trade buyers and sellers can effectively collaborate to deliver the best value to end customers, which is beneficial to each side.
• Example: Carrefour Market is a distributor and supplier for Nestle products. Lulu aims for satisfactory transactions and revenue from purchases.

Employees

• Expect fair working

Developing Export Strategy

Companies develop this strategy when customers in other countries request their goods.

Step 1: Identify a Potential Market

A company should conduct market research and analyze the results. Example: ART BRZ

Step 2: Match Needs to Abilities

Determine whether the company can meet the needs of the market. Example: Air conditioning

Step 3: Initiate Meetings

Build trust and develop a cooperative environment among all parties. Example: Arizona Companies

Step 4: Commit Resources

Allocate the company's human, financial, and physical resources to the project.

Export/Import Financing

1. Open Account

Export/Import financing where an exporter ships merchandise and later bills the importer for its value. Example: MGT briefcase

2. Advance Payment

Export/...

Characteristics of a Financial Plan

• It's a roadmap that can be used to guide a company into the future.
• Can be used to attract investors.
• Explains how a business will manage its records and why.
• Describes any legal agreements that influence the way records are kept.

Six Things an Effective Plan Contemplates

• Identifies the assets that need to be purchased.
• Describes the amount of money a business needs to start and operate.
• Describes the expenses the business will incur and explains how a business will cover its expenses.
• Describes how a business will document and report financial reports.
• Forecasts finances to project future profitability.
• Explains how the business will acquire money to grow or expand.

Startup Capital

Startup capital is the money used to...

PROFORMA INVOICE

It is a document without taxes value, the seller provides it to the buyer, contains most of the necessary information about an international operation. If the buyer accepts, it is understood that the buyer accepts and confirms the information indicated on it.

The Liquidity Preference Theory of Interest

The Liquidity Preference Theory, presented by J.M. Keynes in 1936, is a highly regarded theory. According to Keynes, the rate of interest is a purely monetary phenomenon. It represents the reward for relinquishing liquidity for a specific period.

Thus, similar to the price of a commodity, the rate of interest is determined by the demand for and the supply of money. Therefore, it is necessary to introduce the concepts of demand for money and supply of money.

The supply of money refers to the stock of money in circulation and is a fixed quantity at a particular point in time. It is the sum of currency (notes and coins) and commercial bank deposits. It remains fixed in the short run because it is determined...

Company Dimension and Financing

This analysis examines the economic and financial structure of Tangoe, a company that has experienced continuous growth over the past decade, despite a decrease in non-current assets in 2014. The increase in total assets has been primarily financed by current liabilities.

Current Assets

Current assets have increased by almost 20%, mainly driven by growth in both Cash and Accounts/Trade Receivables.

• Cash: Increased by 8,000 thousand dollars, representing 43% of total current assets and 23% of total assets in 2014.
• Accounts Receivable: Experienced significant growth/decrease (receivables).

Capital and Revenue

The company's capital has fluctuated in recent years. In terms of sales and revenues, Tangoe has seen a clear...

Vertical Integration

The process in which several steps in the production and/or distribution of a product or service are controlled by a single company or entity, in order to increase that company's or entity's power in the marketplace.

Horizontal Integration

Much more common and simpler than vertical integration, Horizontal integration (also known as lateral integration) simply means a strategy to increase your market share by taking over a similar company. This take over / merger / buyout can be done in the same geography or probably in other countries to increase your reach.

Merger

An agreement by shareholders and managers of two businesses to bring both firms together under a common board of directors with shareholders in both businesses owning...

Inflation

Inflation is an increase in the average level of prices of goods and services.

Types of Inflation

• Demand-Pull Inflation: This occurs when various factors increase aggregate demand, leading to inflation.
• Cost-Push Inflation: This is a decrease in the supply of goods caused by an increase in the cost of production.

Causes of Inflation

• Increase in the cost of raw materials
• Increase in the cost of inputs (land, labor, capital)
• Increase in the cost of borrowing by producers
• Natural calamities, floods, earthquakes

Consequences of Inflation

• Price effect: Consumer consumption will go down.
• Income effect: Real income may decrease.
• Saving effect: Consumer saving declines.
• Wealth effect: The value of assets like land, cash, stocks, bonds, and bank deposits