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

E-commerce Fundamentals

Payment Methods for Online Shoppers

Online shoppers commonly use a credit card or a PayPal account to make payments. Other alternative methods include:

• Billing to mobile phones
• Cash on delivery (COD)
• Check
• Debit card
• Electronic money
• Gift cards
• Postal money order
• Invoice

Product Delivery Options

• Downloading (for music, movies, images, etc.)
• Drop shipping (the manufacturer ships the item directly to the consumer)
• In-store pick up (collecting items at a physical shop)
• Printing or by e-mail (tickets for concerts, cinema, etc.)

Market Share and Statistics

E-commerce represented 8% of sales in the USA. In 2012, there were 242 million people shopping online in China.

Advantages of E-commerce

• Convenience

  Online shops are usually available 24 hours

Fiscal policy can be defined as governments' actions to influence an economy through the use of taxation and spending. This type of policy is used when policymakers believe the economy needs outside help to adjust to a desired point. Typically, a government has a desire to maintain steady prices, employment level, and a growing economy. If any of these areas are out of sorts, some type of fiscal policy may be in order.

Fiscal policy can be used to either stimulate a sluggish economy or to slow down an economy that is growing at a rate that is getting out of control (which can lead to inflation or asset bubbles). Fiscal policy directly affects the aggregate demand of an economy. Recall that aggregate demand is the total number of final goods...

1. Real GDP per Person

Define real GDP per person. At what rate did the U.S. real GDP per person grow from 1914-2014? –Real GDP per person is real GDP divided by the population. Real GDP per person tells us the value of goods and services that the average person can enjoy. Real GDP per person in the U.S. doubled between 1960 and 1987 and almost tripled between 1960 and 2013.

2. Factors Affecting Potential GDP

What are the two factors that make potential GDP grow? –Potential GDP, which is the maximum level of real GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurial ability that would bring rising inflation and fluctuations of real GDP.

3. Classical Growth Theory

What is classical growth theory? –A

The Impact of Declining Oil Prices on the Global Economy

The most relevant issue in recent economic news is the spectacular decline in petroleum prices over the past several months, with its economic value falling by 46% since last June.

Nowadays, petroleum is considered the most important energy source, leading many countries to base their economies on petroleum and its byproducts. Therefore, it is widely known as 'black gold'.

Global Demand and Price Fluctuations

In July 2014, the International Energy Agency (IEA) predicted that worldwide demand would increase by 1.4 million barrels per day (bpd) in 2015. However, these projections were revised three months later. Demand growth was lower than expected due to slower global economic growth and...

Market Research: Primary and Secondary

What is market research?

Market research is the process of gathering, analyzing, and producing data relevant to the marketing process, such as the size of the market, key market trends, or characteristics of customers. Market research can identify the reasons for buying a product and customers’ wants. It provides a manager with information for effective decision-making. The objective of market research is to meet consumers’ needs more effectively.

Primary and Secondary Market Research

Primary market research gathers data for the first time for a specific purpose and is conducted face to face with customers. It can be tailored precisely to your own needs but can be expensive and time-consuming. Mistakes...

Types of Business Costs

• Fixed costs: These are costs that do not change when the enterprise changes the level of production. For example, a company pays the same amount for local rent every month.
• Variable costs: These are costs that change when the enterprise changes the level of production. For example, a language academy pays the salary of an English teacher depending on the hours worked.
• Average variable cost: This is the variable cost per unit. To calculate it, we must divide the variable cost by the units produced. If the selling price is higher than the average variable cost, it is profitable; if it is lower, it would mean losses.
• Direct costs: These costs are directly related to the product produced. The factors of production that are the

Business Concepts

What is a Business?

A business is an organization that strives for a profit by providing goods and services desired by its customers.

Goods

Tangible items manufactured by businesses.

Demographics

Baby Boomers

Baby boomers are people born during the demographic post-World War II baby boom, approximately between the years 1946 and 1964.

Generation X

Please provide information about Generation X.

Generation Y

Please provide information about Generation Y.

Economic Systems

Capitalism

Economic system based on competition in the marketplace and private ownership of the factors of production.

Communism

Economic system characterized by government ownership of virtually all resources, all markets, and economic decision-making by the central government....

What is a Business Plan?

A Business Plan is a Written Document that details proposed venture: Describes the current status, expected needs and projected results of a new Business /Covers the project’s research and development, manufacturing, management, marketing, critical risks, financing and milestones or timetable

Demonstrates a road map of where the venture is aimed to reach and how the entrepreneur proposes the route it will reach by.

Elements of a Business Plan:

Sec 1: Executive Summary: summary or brief statement of a longer report or proposal about the project for the reader to be acquainted with without reading the full details Sec 2: Business Description: Is the key element of a full business plan (how to make profit), ranges between...

Economic Boom and the Great Depression

A period of general prosperity in the 1920s ended with the collapse of the Great Depression in the 1930s.

Key Factors and Events

• Bull Market: A stock market in which stock prices were steadily increasing. In the bull market of the 1920s, stock prices became vastly inflated.
• Buying on Margin: Purchasers were able to buy stocks on margin, putting only 10% down and borrowing 90%.
• Speculation Boom: Refers to the practice of buying real estate, stocks, or anything else to sell later at a profit.
• Black Tuesday: The market crash on October 29th.
• Smoot-Hawley Tariff: Reduced international trade.

Key Figures and Groups

• Herbert Hoover: Republican who believed in Laissez-faire economics. He did not think the federal government