Notes, summaries, assignments, exams, and problems for Economics

The Gold Standard: A Historical Overview

The gold standard is a monetary system in which money is freely convertible into a fixed amount of gold. It evolved from the variety of commodity money there was before the development of paper money and fractional reserves banking. It started to function in 1871. As we know, this century was characterized by globalization and an increase in international trade. Therefore, all trade imbalances between nations were settled with gold. The main priorities of the government were to maintain gold reserves and exchange rate stability.

The Trilemma of the Open Economy

If you had the Gold Standard you had fixed exchange rates and unrestricted capital mobility but Not Monetary Autonomy. As a result, countries always...

Chapter 1: Economic Foundations and Models

I. What is Economics?

Economics is the study of how people and societies choose to allocate scarce resources. It explores how individuals, businesses, and governments make decisions in the face of limited resources and unlimited wants.

Resources:

• Inputs, factors of production
• Goods or services used to produce other goods or resources

Primary Factors of Production:

• Labor (mental, physical)
• Capital (tools, equipment, structures)
• Land (natural resources like water, oil)

Scarcity:

• The fundamental economic problem: resources are limited.
• We face constraints in our choices.
• Economics seeks to determine the best allocation of scarce resources.
• The goal is to maximize utility (satisfaction) in the face of scarcity.
• Without

Market Segmentation and Targeting

True/False Questions

Question 4

Dove, a division of Unilever, traditionally targeted both men and women with its Dove-branded skin care products.

Question 6

For some consumer products such as cigarettes, soft drinks, and candy that have a low per-unit cost, income is often a more valuable segmentation variable than population.

Question 12

Categories such as "successful idealists" and "affluent materialists" can be used to describe psychographic segmentation, not age segmentation.

Question 13

Sometimes it is preferable to market to a particular mind-set rather than an age group; in such an instance, psychographic studies can help marketers arrive at a deeper understanding of consumer behavior than is possible with traditional...

Different Types of Businesses

Classification by Level of Activity

Primary activity: It takes all the natural resources and makes them more useful to consumers (e.g., timber).

Secondary activity: It takes the materials provided by primary industry and processes them in order to satisfy society’s needs (e.g., process minerals). However, there are companies that are supplied by other companies from the same sector, such as assembly-line companies. If a product’s demand decreased, it would cause a domino effect on other product’s demand (e.g., construction).

Tertiary activity: It provides all the services that industry and consumers demand, with the aim to satisfy directly consumer’s needs.

Classification by Size

Turnover, capital employed, number...

Social Networks

are spaces on the internet formed by communities of individuals with interests and activities in common, such as friendship, kinship, work, and that allow contact between them, so they can share content and interact.

No one thought that social networks were going to be a success

Many believed that they were just going to be a fad and would soon disappear. What is even more surprising is that it is now a consolidated universal platform, a highly requested and necessary tool for a brand, company, business, or artist. But it is not only of great help for various sectors, also for any individual who is in them.

Now, networks are already generating employment

but it was never thought that it would ever exist. New jobs were born due to

The three internal communication patterns are vertical, horizontal, and network. In vertical communication, messages travel upward or downward along the chain of command. In horizontal communication, messages are exchanged between or among people who need to share data or coordinate effort. In network communication, messages flow freely among those who have a common bond that extends beyond their specific role or unit within the organization.

The Great Depression

Starting with the collapse of the US stock market in 1929, the Great Depression was a period of worldwide economic stagnation and depression. Heavy borrowing by European nations from the USA during World War I contributed to instability in European economies. Sharp declines in income and production occurred as buying and selling slowed down. Widespread unemployment resulted, and countries raised tariffs to protect their industries. America stopped investing in Europe. This led to a loss of confidence that economies were self-adjusting, and President Herbert Hoover was blamed for the crisis.

Hoovervilles

Depression shantytowns were named after President Hoover, whom many blamed for their financial distress.

The New Deal

A series...

Debt and Equity Financing

Debt financing: This is when you borrow money from a bank or a financial institution, such as through bonds.

Equity financing: This is when you offer a portion of your company, such as stocks, in exchange for capital. You don't have to pay the money back, but you give up a portion of ownership.

• Bonds: Less risky with lower returns. The return of your money plus interest is guaranteed. Bonds are issued by companies, governments, etc. They are fixed-income securities, with the issuer being the borrower.
• Stocks: More risky with potentially higher returns. However, you assume the risk of the company not being successful.

Equity

• Additional paid-in capital: Capital that shareholders have contributed to the company above the nominal

Project Administrative Regulations

Here are some aspects regulated by the administrative basis of a project:

• Type of Contract
• Payment Terms
• General Terms and Conditions
• Teamwork Requirements
• Fines and Penalties
• Budget Allocation
• Site Visit Requirements
• Residence of Workers

Purpose of a Site Visit During Proposal Call

A site visit during the call for proposals serves to resolve questions regarding the site's topography for the project. This includes clarifying aspects related to access, available facilities, and services such as provisional water and power.

Essential Resources for Project Realization

According to the classification of resources, the following types are necessary for the realization of a project:

• Human Resources
• Financial Resources
• Material

Definitions:

• Transport: The transfer of people and goods from one place to another.
• Shopping Center: This is a large complex which includes small specialty shops.
• Import: Purchase of goods and services that a country performs abroad.
• Ecotourism: Focuses on the knowledge of nature and the ecological value of protected areas.
• Balance of Payments: Reflects all economic transactions by a country with the rest of the world during a period of time.
• Charter Flight: A flight booked by a tour operator to transport passengers to a holiday destination, when passenger demand requires it.

Two Types of Internal Trade:

• Wholesale: The company conducts a business that purchases goods in bulk directly from producers for resale to retailers.
• Retail: The retail business