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

Understanding Business Costs

In business, understanding different types of costs is crucial for effective financial management. Costs can be categorized based on how they behave in relation to production levels or how directly they can be attributed to a product or service.

Key Cost Classifications Defined

• Variable costs change in proportion to the amount of output produced.

• Fixed costs remain the same, no matter how much the business produces.

• Semi-fixed costs are costs which only change when there is a large change in output. For example, costs associated with buying a new machine to cope with increased production.

• Direct costs are costs which can be identified directly with the production of a good or service; e.g., raw materials.

• Indirect costs

Monopoly, Oligopoly, Cartels, Trusts, and Holdings

• Monopoly: A single company has complete control of a sector.
• Oligopoly: Stocks in each sector are controlled by a few large companies.
• Cartel: An agreement between companies to divide the market and artificially raise or maintain prices.
• Trust: A permanent merger of companies.
• Vertical Integration: A firm controls the entire production process.
• Dumping: Selling at a price below production costs temporarily to eliminate competition.
• Holding: Companies are controlled by the same bank.

New Production Systems

Taylorism: Scientific management of work based on the ideas of Frederick Taylor.

• Division of Labor: Each worker is assigned specific tasks in the production process.
• Tasks are timed to establish sanctions

Financial Goals: Profit vs. Wealth Maximization

The basic dictum of financial planning is “the earlier, the better.” According to this principle, Project ‘B’ is often preferable in investment scenarios.

Profit Maximization: Limitations

The profit maximization goal often overlooks critical factors, including the time value of money and the quality of benefits. If predicted earnings are more assured, the quality is high because the range of fluctuation is small. Profit maximization ignores the true value of benefits and does not consider the risks associated with profits.

The following table demonstrates the concept of Quality of Benefits based on Profit per Annum:

Key Economic Terms

Externalities

Positive or negative effects on third parties not included in the costs of a company without compensation.

Macroeconomics

The study of the economy as a whole for all economic agents in the country. Key variables include CPI, GDP, GNP, aggregate spending, consumption, investment, and unemployment.

Gross Domestic Product (GDP)

The monetary value of the production of final goods and services produced within an economy of a country in a specific time period, usually one year.

Gross National Product (GNP)

Value of final production of goods and services made by firms and production factors for a year.

Economic Policy Instruments

Fiscal Policy

Uses the state budget.

Monetary Policy

Concerns the amount and price of money (interest...

STAKEHOLDERS: groups or people who depend on an organization to achieve their own goals and on whom, in its turn, an organization depends. They can be affected by the goals, actions or behaviours of the firm. Types: Internal (shareholders, directors, managers, employees), External: clients, suppliers, financial institutions, competitors, government..). Some external stakeholders may try to influence the strategy through their relationship with internal stakeholders. POWER/INTEREST: Goals: describe and analyze the stakeholders that can affect firm's strategy, analyze the game of power, manage the power and behavior of stakeholders. Stages: describe stakeholders, asses the power of each stks and potential coalitions, describe the interest of...

OPRE 3310 Exam 1 Practice Questions

1) A supply chain with a distributor has more product handling than one without a distributor.

▢ True ▢ False

2) Lead time is a way to measure the availability of inventory.

▢ True ▢ False

3) Goods-producing organizations are not involved in service activities.

▢ True ▢ False

4) Service operations require additional inventory because of the unpredictability of consumer demand.

▢ True ▢ False

5) Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom-made parts.

▢ True ▢ False

6) Services can be stored and are not provided “on demand.”

▢ True ▢ False

7) Productivity is defined as the ratio of output to input.

▢ True ▢ False

8) As long...

In my particular case, I found it interesting to understand How in certain areas of the production of society, appears a phenomenon (due to The increasing returns on a scale) where the demand does not admit more than One company in the market without it being resent social welfare for the Increase in costs. Therefore a situation of natural monopoly is given.

On the scenario of our project, we see that we are an Electric company, (Company Victor SA), the structure of increasing returns to Scale allows us, to produce more, and be more productive, in addition, we will Attract more public, and the cost unit of the product will be less. Instead, in This scenario we will have to make a great initial investment, such as Infrastructure, this will be...

Qualities of Entrepreneurs

1. Initiative

2. Drive and Determination

To turn ideas into practice.

3. An Ability to Plan Carefully

To minimize the risk of failure.

4. An Ability to Learn from Mistakes

And to see mistakes as "part of learning to succeed".

5. The Ability to Think Ahead

To identify opportunities for the future.

Factors to Consider When Selecting Suppliers

Quality

1. The quality of suppliers needs to be consistent.
2. Customers can be selective about quality.
3. Customers will associate poor quality with the business they buy from, not their suppliers.

Availability

1. If a supplier is often out of stock of items, it could affect the firm's production process.
2. So they need to make sure their supplier can provide stock in sufficient quantities.

Reliability and

Understanding Governmental Proprietary Funds and Business Activities

Recording and Accounting for Stock of Transactions of Goods

Accounting for Stock in the PGC

The System of Accounting Records and Accounts of the PGC Identification

300 -> Goes Active

600 -> Shopping

700 -> Sales

There are 2 sets of recording the goods:

1. Administrative Procedure: Only the account becomes 300.

(300) to (400) BUY

(430) to (300)

(700) SALES

2. Procedure Speculative:

(600) to (400) BUY

(430) to (700) SALES

You can do both methods but speculative is recommended. We distinguish two phases:

• During the year: The balance of the 300 reflects the opening balance.
• End of the year: An adjustment is made. There are 2 ways:
  • Balance goes to 600/700 129.
  • Inventory mirror 300. This is carried through the book store.

Create Accounts and Sub-Stock

The General...