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

Stock Valuation Principles

Company management must understand the value of products to plan short-term storage needs within production, trade, and finance. Stocks purchased externally are valued at the purchase price, while products manufactured internally are valued at the production cost.

Purchase Price

This is the total purchase amount according to the supplier's invoice, plus all expenses generated by the operation (transport, insurance, packaging, and non-deductible taxes).

Acquisition Price = Invoiced amount of goods + Operational costs

Cost of Production

This represents the money spent on raw materials and supplies consumed in manufacturing, direct production costs (labor, energy, etc.), and the proportion of indirect costs attributable to...

The New Deal: Federal Intervention and Economic Reform

The term New Deal, often translated as 'New Opportunity', was used by Franklin D. Roosevelt as a political banner in the U.S. presidential elections of 1932, the first since the Great Depression of 1929. After winning the election, the name was applied to a series of federal laws that fundamentally changed the American economic system. Previously governed almost exclusively by the laws of supply and demand, the system became heavily involved with the federal government.

The New Deal program was very broad, ranging from emergency solutions to long-term structural projects:

• Emergency Measures: Such as the Emergency Banking Act, which was implemented within a few days to prop up the banking system.

Key Sources of External Business Finance

The main sources of external finance for the medium and long term are contributions from partners, which become resources or capital, and other long-term funds from outside the company. These funds must be repaid within the agreed time and constitute the non-current or long-term liabilities of the company.

Contributions from Partners (Capital Increase)

This capital reflects the contributions that partners have made during the constitution of the company or in subsequent expansions to increase the capacity or size of the business. These funds will not be returned; therefore, these resources are treated as equity, as opposed to other sources of external financing that must be repaid.

Medium and Long-Term Loans

A...

Macroeconomic Figures and Measurement Challenges

Macroeconomic figures are typically measured using three primary approaches:

• Cost (C)
• Production (O)
• Income (Y)

Difficulties in Measurement

Accurately measuring these figures presents several challenges:

1. Heterogeneity of Products: The variety of products makes assessment difficult, especially for non-market goods and services (avoiding products not assessed in monetary terms).
2. Variation in Prices: Dealing with price fluctuations requires using constant prices to ensure meaningful comparisons.
3. Double Counting: To prevent overestimation, only value added should be counted.
4. Non-Economic Activities: Certain activities, such as some sports or illegal activities, are not economically accounted for (they escape

Production Functions and Value Creation

The core Functional Departments of Production (FUNC.DEP.PROD) include:

• Provision (Sourcing)
• Manufacture
• Storage
• Quality Control

Understanding Value Added

Value Added (VALOR AÑADIDO) is the sum of additional value applied to raw materials, which individually have a lower value, resulting in a combined final product of higher worth.

Factors of Production and Technology

Factors of Production (FACT.PROD) are the physical, human, and organizational resources which, when combined, produce a specific good or service. These factors are:

• Natural Resources: Raw materials that form the product.
• Labor: The effort or time workers devote to producing a good or service.
• Capital: The set of goods needed for investment and production.

Financial Markets: Core Functions and Definitions

• Markets that channel funds from those who have an excess of available funds to those with a shortage.
• They promote economic efficiency.
• They channel funds from those without a productive use to those with a productive use but who have a shortage of money.

The Necessity of Financial Markets

Financial markets address critical economic issues, including:

• Matching: Connecting borrowers and lenders efficiently.
• Transaction Costs: Reducing the time, energy, and money required to facilitate transactions.
• Asymmetric Information: Addressing information failure that occurs when one party has significantly more knowledge than the other party.
  • Adverse Selection: A problem of asymmetric information that occurs before

Supply Chain and Logistics Fundamentals

The movement of materials, work-in-process inventory, and finished goods from the point of origin to the point of consumption involves interconnected networks. These interlinked networks, channels, and node businesses combine to provide the products and services required by end customers within a supply chain.

Core Components of Logistics

Logistics involves several key functions and processes:

• Purchasing raw materials and component parts (procurement): This includes managing the bargaining power of suppliers; companies might produce their own components or lease them.
• Managing inventory
• Packaging products
• Getting products to customers

Understanding Inventory Categories

Inventory consists of all raw materials,...

Strategic vs. Operative Marketing

• Strategic Marketing: Focuses on the long-term. The main goal is to contribute to competitive advantages.
• Operative Marketing: Focuses on the short-term. The main goal is to influence the consumer directly.

Transactional Marketing

Individual interests are more important than joint benefits, leading to individual maximization. It involves a pure exchange of a product for money and maintains a short-term relationship.

Relational Marketing

Selling involves more than just money; it creates economic, social, and psychological bonds. The process focuses on understanding what satisfies the customer. It is a psychological approach aimed at building long-term relationships.

Brand Definition

A brand is a set of elements, shapes,...

Joint Ventures vs. Strategic Alliances

A joint venture is a commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct identities. A strategic alliance is an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project.

Advantages and Disadvantages of Franchising

Franchising is a popular method for business growth. Below are the key benefits and drawbacks:

Advantages

• The risk of business failure is reduced.
• Products and services already have an established market share.
• You can leverage a recognized brand name and trademark.
• The franchisor provides a complete support package, including training, setup assistance, operational manuals, and ongoing

Inventory and Logistics Fundamentals

• The less frequently a product is ordered, the lower the inventory carrying costs: FALSE
• The term "logistics" management describes: TRUE
• Three of the world's five largest retailers: TRUE
• Trucks' capability is second only to water: FALSE
• Water transportation is rated "low": TRUE
• Which of the following transportation modes is fastest: Air

Global Retail Strategy and Market Entry

• The reason why Saks Fifth Avenue has licensed: TRUE
• The retail environment in developing countries presents: Mom-and-pop stores
• To motivate shopkeepers to stock more of P&G's products: Golden Store Program
• Walmart pulled out of Germany: TRUE
• What solution did Andersen Consulting provide: Package the bread in plastic bags
• When a company uses intermodal