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

What is Economics?

Economics is the science of economic phenomena such as consumption, production, and distribution. The objective of economics is to explain and predict economic behavior.

Economic Theory

Economic theory is a set of general principles about the economy. It is divided into two main branches:

Microeconomics

Microeconomics analyzes the behavior of individual economic units such as families, businesses, workers, goods, prices, production companies, and consumption.

Microeconomic Problems:

• Consumption, production, and distribution in various market forms (perfect competition, imperfect competition, monopoly, oligopoly).
• Remuneration of production factors (rent, interest, wages, profit).

Macroeconomics

Macroeconomics studies the economy as...

Income and Wealth

Income

Total income received by owners of factors of production.

Income Distribution

How income is distributed among owners of factors of production as wages, land rents, interest, and profits. Depends on two factors:

• Wage differences (if they are small, income distribution is relatively equal)
• Wealth distribution (some countries have broad access to wealth but large income differences)

Wealth

Net asset value of tangible, physical, and financial assets.

Labor Market Dynamics

Labor Demand

Depends on wages, productivity, and prices of goods produced.

Individual Labor Supply

Shows the number of hours an individual is willing to work at a given wage.

Labor supply depends on:

• Wages
• Population
• Labor force participation rate

Aggregate Labor Supply

Represents...

What is E-commerce?

Definition of E-commerce

E-commerce is the process of conducting commercial transactions, such as buying and selling goods or services, using the internet and electronic communication.

Types of E-commerce

• Business-to-Consumer (B2C): Businesses selling directly to individual consumers (e.g., online retailers).
• Business-to-Business (B2B): Businesses selling to other businesses (e.g., wholesale suppliers).
• Consumer-to-Consumer (C2C): Individuals selling directly to other individuals (e.g., online marketplaces).
• Mobile Commerce (M-commerce): Transactions conducted through mobile devices.

Significance of E-commerce

E-commerce is important because it offers businesses the ability to reach a global audience, operate 24/7, reduce costs,...

Financial Manager Responsibilities

A financial manager oversees an organization's financial operations and reporting. They ensure compliance with legal and regulatory requirements and help management make informed financial decisions.

Key Responsibilities

• Financial Reporting: Prepare financial statements, business activity reports, and forecasts.
• Budgeting: Manage budgets and create revenue and budget projections.
• Financial Analysis: Analyze market trends, financial statements, and business performance.
• Financial Operations: Monitor financial operations such as payroll, invoicing, and cash flow.
• Strategic Planning: Formulate long-term business plans and investment strategies.
• Risk Management: Identify and minimize financial risk.
• Compliance: Ensure

Reading Comprehension Answers

Part 1: Multiple Choice

1. b
2. a
3. c
4. a
5. b

Part 2: Short Answers

1. hundreds of accountants
2. call prospective customers
3. call companies that will be interested in your services
4. be an effective way to promote your business
5. can help you manage it

Vocabulary Exercise Keys

Part 1: Business Terminology

1. renovations
2. competitors
3. deductions
4. specialises (or specializes)
5. wastes
6. shareholders
7. regrets
8. tests

Part 2: Matching and Financial Terms

Matching (1-5)

1. c
2. d
3. e
4. b
5. a

Key Business Concepts (1-5)

1. accrued expenses
2. share capital
3. focus group
4. net worth
5. marketing strategy

Part 3: Fill-in-the-Blanks

1. creditors
2. tax
3. liabilities
4. call
5. increased
6. figures
7. profit

Part 4: Selection

The correct items are: 1, 4, 7, 8.

Part 5: Phrases and Dialogue Completion

1. brand, I don’t mind
2. demand, promotion
3. gone out

Functions of a Financial Market

• Connecting Buyers and Sellers: Facilitates the meeting of buyers and sellers of financial assets without needing a physical location.
• Issuance and Exchange of Assets: Supports the creation (primary markets) and subsequent trading (secondary markets) of financial assets.
• Price Determination: Establishes the prices of financial assets through various pricing mechanisms, such as supply and demand or predetermined conditions.
• Public Information: Disseminates information about asset prices, trading mechanisms, and pricing systems.
• Providing Liquidity: Ensures that assets can be easily converted into cash without significant loss of value.
• Reducing Transaction Costs: Lowers the costs related to finding counterparts and determining

ALOS: Average Length of Stay

Total occupied room nights/total bookings

Attrition

Difference between the number of rooms reserved compared to the number of rooms used

Booking Curve

An important tool for yielding that provides a visual representation of the pickup, number of bookings, availability, and yielding capacity of the hotel over time

Pick Up

No. of reservations between today & day of arrival

Contract

>30 nights + large volume

Group

>10 rooms, contract, deposit

• Corporate: Negotiated rate for a block with a specific company
• Association/Convention: Negotiated rate for a block with trade, professional, philanthropic association
• Government: Negotiated rate for a block with a qualifying government agency

Transient

Ind & groups

• Retail: Market

Production

Processing raw materials to create products that are ready for consumption. Production also includes the assembly of goods. This department exists in companies that belong to the secondary sector. In general, the primary sector (agricultural and fishing) and the tertiary sector (services) do not have this functional area.

Purchasing

Obtaining and analyzing quotes/prices from suppliers, buying at the right time by coordinating with the warehouse supervisors.

Sales

Organizing sales promotions, looking for new customers, preparing the best quotes/prices.

Marketing & Advertising

Dissemination of information about the company's products. Persuading potential clients to buy the company's products through promotions, advertising, sales…

Commercial

Providing...

Bank Liabilities & Financial Operations

Deposits: Core Bank Liabilities

A deposit is a contract or transaction involving the transfer of money to a bank account.

Types of Deposits:

1. Demand Deposits: Normal deposits for frequent, on-demand access to funds. They are more liquid and less costly for the depositor.
   • Current Accounts: Deposit accounts not primarily for earning interest or savings, but for the convenience of business or personal clients.
   • Money Market Accounts: Less liquid, offering higher interest rates. These are interest-bearing deposit accounts based on current money market rates, typically requiring a higher minimum balance to earn interest or avoid fees.
   • Savings Accounts: Less liquid, offering lower interest rates. These accounts