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

MPO: Management, Planning, and Organization

Goals

Goals are defined as the long-term strategic aims of the organization. Examples include consumer goals, product goals, operational goals, and secondary goals.

Objectives

Objectives are defined as the things a business wants to achieve in a certain time frame. Examples include business survival, maximizing profit, maximizing sales, boosting customer satisfaction, and expanding the business.

Policies

Policies are defined as the framework and structure a business works within. Examples include legal policy, human resources, health and safety policy, promotion and employment policy, and recruitment policy.

How They Contribute to Effective Management

• Goals provide a long-term look at what the company wants

Sizing Capacity Cushions

Capacity cushion is the amount of reserve capacity a process uses to handle sudden increases in demand or temporary losses of production capacity.

Capacity cushion = 100% - average utilization rate (%)

Timing and Sizing Expansion

Expansionist Strategy: Timing and sizing of expansion are related if demand is increasing and the time between increments increase

Wait-and-See Strategy: The conservative wait strategy is to expand in smaller increments, such as renovating existing facilities.

Combination of Strategies

Project

An interrelated set of activities with a definite starting and ending point, which results in a unique outcome from a specific allocation of resources.

The Three Main Goals

Complete the project on time, Do not...

Unemployment Types and Dynamics

Unemployment is a multifaceted economic phenomenon, categorized into several distinct types based on its underlying causes.

Frictional Unemployment

Frictional unemployment arises because both workers and firms need time to locate each other and to digest the information about the value of a potential job match. It is a natural part of a dynamic labor market.

Structural Unemployment

Structural unemployment occurs if the skills or characteristics of persons looking for work do not "fit" the jobs available. This mismatch can be due to technological changes, shifts in industry, or geographical immobility.

Cyclical Unemployment

Cyclical unemployment arises because the economy has moved into a recession. During such periods,...

Understanding Economic Activities

3S: A group of economic activities that consist of offering services.

• Public services (offered by the state): Healthcare, Education
• Distribution services (change the position of something): Transport, Telecommunications, Trade
• Business services (company to company): Repairs, Installations, Professional services
• Customer services (company to people): Repairs, Installations, Personal services, Trade, Travels, Tourism

Quaternary Sector: A group of economic activities classified within the 3S. Commonly, services require a lot of training and formation. Includes mostly scientific and technological research, such as Biomedicine.

TransNet: A combination of nodes and pathways.

• Nodes (N): Points of departure and arrival for

Unit 4: Cost Allocation and Imputation Itinerary

1. Methodologies for Cost Location

1.1. Based on Functions and Departments

The location of costs, or the itinerary of imputation, aims to find the entity that originates the cost.

In accounting for the presence of indirect costs—which measure resource consumption that cannot be directly traced to the product—it is necessary to find a way of estimating the relationship between the volume of costs and the volume of production. The solution is to set an itinerary of imputation, with different stages represented by cost centers, determining the relationship between resource consumption in the center and the different costs. Costs could be directly allocated to sections or centers or indirectly, using...

Perfect Competition: Meaning and Definition

A perfectly competitive market is one with a large number of buyers and sellers, all trading a homogeneous product without artificial restrictions, and possessing complete market knowledge.

In other words, a market is considered perfect when all potential buyers and sellers are immediately aware of transaction prices. Under these conditions, the price of the commodity tends to equalize across the market.

As Mrs. Joan Robinson stated, "Perfect competition prevails when the demand for the output of each producer is perfectly elastic."

According to Boulding, "A perfectly competitive market may be defined as a large number of buyers and sellers all engaged in the purchase and sale of identically similar commodities,...

Incoterms: Defining Shipping Responsibilities and Risk

Incoterms (International Commercial Terms) are a series of predefined commercial terms published by the International Chamber of Commerce (ICC). These terms communicate the tasks, costs, and risks associated with the transportation and delivery of goods in international trade.

Key Incoterms Rules Explained

EXW (Ex Works)

This term places minimum responsibility on the seller, who merely has to make the goods available, suitably packaged, at their premises. The buyer is responsible for loading the goods into a vehicle and for all export procedures.

FCA (Free Carrier)

A very flexible rule suitable for all situations where the buyer arranges the main carriage. The seller is responsible for export...

Basic Economic Problems

In view of the scarcity of resources at our disposal and the unlimited ends we seek to achieve, the economic problem lies in making the best possible use of our resources so as to get maximum satisfaction in the case of the consumer and maximum profit for the producer. Hence, economic problem consists in making decisions regarding the ends to be pursued and the goods to be produced and the means to be used for the achievement of certain ends.

Fundamental Problems facing an economy (Basic Economic Problems)

What to Produce?

The first major decision relates to the quantity and the range of goods to be produced. Since resources are limited, we must choose between the different alternative collection of goods and services that...

Dumping And Anti-Dumping Duties

Major Economic Schools of Thought

Classical Economics

The core belief is that government should not be involved in economics, emphasizing economic freedom and the principle of Laissez Faire, Laissez Passer.

Key tenets:

• People are motivated by rational self-interest.
• The Invisible Hand is a natural force that maintains harmony between individual, selfish decisions and leads to overall prosperity.

This theory was famously explained in The Wealth of Nations by Adam Smith.

Marxian Economics

Based on the work of Karl Marx, this school focuses heavily on the role of labor.

Marx argued that the specialization of labor combined with population growth leads to a decrease in wages. Profit obtained by the owner includes surplus value (labor not paid to the worker)...