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

Effective Internal Control

Internal control is responsible for managing all the money that a company receives from sales and other income, as well as its exits under a program to pay suppliers to cancel those coming and services.

Purpose of Effective Internal Control

• Protecting resources against waste, fraud, and shortfalls
• Promoting adequate accounting data
• Encouraging compliance with company policies
• Judging the efficiency of operations

Major Cash Inflows in the Company

1. Cash sales
2. Charges to customers
3. Borrowings
4. Sales of fixed assets

Items That Are Not Part of Cash

1. Vouchers boxes
2. Postdated checks
3. Returned checks
4. Tax stamps and mailing

Recommendations for Petty Cash Management

1. Make careful counts.
2. Separate the group cash.
3. The person doing the counting should

Monopsony Defined

A monopsony describes a market condition where there is only one buyer for a particular good or service, even if there are many sellers.

Duopoly Explained

A duopoly refers to a market structure where two producers dominate the market for a specific good or service.

Understanding Oligopoly

An oligopoly describes a market structure characterized by a small number of dominant sellers (bidders). Due to their limited number, these firms possess significant market power, but their decisions are interdependent, meaning they must consider the actions of their competitors.

What is a Cartel?

A cartel is a formal agreement among firms within a sector, designed to reduce or eliminate competition in the market.

Defining Market Power

Market power...

Personal Disposable Income (PDI)

Personal Disposable Income (PDI) is the income that consumers truly have at their disposal for consumption and savings.

Income Per Capita

Income Per Capita is the income available to individuals in a country over a specific period.

Gross National Product (GNP)

Gross National Product (GNP) is the monetary value of all final goods and services produced during a period of time using national factors of production, irrespective of whether these factors are located inside or outside the country. It includes domestic production, while GDP considers national income from factors within the country minus income from factors owned by foreigners.

The Circular Flow of Income

The Circular Flow of Income illustrates how GDP can...

Fiscal Policy

Discretionary: Public works, education, transfers, and tax modifications.
Automatic Stabilizers: Tax contributions.

Types of Deficit

• Cyclical Deficit: Occurs during the inevitable stages of emerging from a recession cycle. It is transient.
• Structural Deficit: A deficit that remains constant even in situations close to full employment.

Deficit Financing: Issuing public debt, raising taxes, or increasing money in circulation.

Factors Determining the Price of Money

Operating risk, loan term, and liquidity (the capacity of assets to become legal tender without losing value).

Monetary Concepts

• AAL: Other liquid assets in the hands of the public.
• Monetary Aggregate: A magnitude that brings together different kinds of money.
• Money Supply: The

Company Assets Breakdown

Non-Current Assets

Intangible Fixed Assets

• Industrial property (e.g., patents, software applications)

Tangible Fixed Assets

• Land and Natural Assets: Farms or solar fields
• Structures: Buildings
• Machinery: Industrial machines
• Furniture: Furniture and other materials
• Information Processing Equipment: Computers and electronic packages
• Transport Elements: Vehicles

Long-Term Financial Investments

• Equity Instruments: Long-term investments in company shares and securities
• Long-Term Credits: Non-commercial loans and credits granted
• Credits from Asset Sales: Credits to third parties from the sale of fixed assets
• Long-Term Deposits: Bank balances held for the long term

Current Assets

Stocks

• Merchandise: Products purchased for resale
• Raw Materials:

Financial Management Fundamentals

Financing Sources and Types

Financing refers to the liquid assets or means of payment required to invest. It involves obtaining funds and managing their repayment.

Own Funds (Equity Financing)

• Capital Contributions: Funds provided by partners and through successive capital increases.
• Undistributed Reserves: Profits retained by the company for self-financing. These are internal sources and include:
  • Legal reserves
  • Statutory reserves
  • Voluntary reserves
  • Grants

External Funds (Debt Financing)

External funds are obtained from outside sources, typically requiring repayment with interest.

Medium and Long-Term External Funds

• Loans: Medium and long-term borrowing, often used to acquire significant assets or shares, repaid with interest.

Production Area Management Fundamentals

The production area management is responsible for planning, organizing, and managing the company's production function.

Production Management Principles

Production management is structured around key objectives and determinants:

Management Objectives:

• Defining desired objectives.
• Planning/scheduling.
• Control.

Determinants of Production:

• Productive Capacity: The maximum amount of a product the company can manufacture.
• Product Demand: The quantity of product the market will demand and the company expects to sell.
• Production System Design: The structure and characteristics of the production process.
• Economic Environment: External situations affecting the company (e.g., economic crises).

Strategic Production Planning

Production...

1. What Is GDP?

GDP is the total monetary value of all final goods and services produced within the domestic territory of a country during a given period, usually one year. It is an important macroeconomic indicator used to measure the size, performance, and economic growth of an economy. Formula: GDP = C + I + G + (X − M).

2. What Is NDP?

NDP is the net value of all final goods and services produced within the domestic territory of a country during a given period, usually one year, after deducting depreciation. It shows the actual addition to the productive capacity of an economy after allowing for the wear and tear of capital goods. Formula: NDP = GDP − Depreciation.

3. What Is NNP at Factor Cost?

NNP at cost is the net value of all final...

Market Failure and the Global Obesity Crisis

Market failure occurs when the free market fails to allocate resources efficiently, causing negative effects on society.

Obesity can be seen as a market failure because consuming unhealthy foods high in sugar and fat creates negative externalities. For example, rising obesity increases healthcare costs for governments and taxpayers due to diseases such as Type 2 diabetes and heart disease. This means the social costs of consuming unhealthy food are greater than the private costs paid by consumers. As a result, too much unhealthy food is consumed and resources are overallocated to these products.

Information Gaps and Asymmetric Information

There may also be information failure. Consumers, especially children,...

TI-Nspire Engineering Economy Cheat Sheet

The Master Tools (F and G)

The Golden Rule: Look at the factor attached in the menu. The letter on the bottom of the fraction dictates what goes in that V slot.

Tool G: Present Worth (PW) Master Tool

Use to pull all money to Year 0 (today).

• Menu: V1 + V2*(P/A) + V3*(P/G) + V4*(P/F)
• V1 [No Factor]: Initial Investment (P). (Usually negative)
• V2 (P/A): Base Annual Income/Expense (A).
• V3 (P/G): Gradient Amount (G). (Amount A changes each year)
• V4 (P/F): Salvage Value / Future Value (F).

Tool F: Annual Worth (AW) Master Tool

Use to flatten all money into equal yearly amounts.

• Menu: V1 + V2*(A/P) + V3*(A/F) + V4*(A/G)
• V1 [No Factor]: Base Annual Income/Expense (A).
• V2 (A/P): Initial Investment (P). (Usually negative)
• V3