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

Key Business Acronyms

• CCP: Chinese Communist Party
• OCA: Online Choice Architecture
• EBIT: Earnings Before Interest and Taxes
• CRS: Corporate Social Responsibility
• GPS: Global Positioning System
• COGS: Cost of Goods Sold

Scott Galloway on the Modern Business Landscape

Professor Scott Galloway highlights oil as the most important commodity. However, in the current era, he argues that social media platforms like TikTok are the real deal, although he believes TikTok should be banned due to its links with the CCP, which he considers a tool of espionage.

Innovation Strategies of Supermajors

Supermajors, or large oil and gas companies, are employing innovative strategies such as:

• Emotional Resonance: Engaging users through comments and attractive content.
• Offloading

Capital Structure

Capital structure refers to how a company finances its operations and investments using different combinations of debt and equity. This structure significantly impacts the company's financial strength and profitability.

Simply put, a company can finance itself through debt (loans, bonds, etc.) or equity (stocks). The choice between these two types of financing determines the capital structure.

Debt involves borrowing money that must be repaid with interest. This can increase financial risk if the debt cannot be repaid, but it can also offer tax benefits due to the deductibility of interest.

Equity, on the other hand, involves financing the company by issuing and selling shares. This does not require interest payments, but it dilutes...

What is Standard of Living?

A person's standard of living is the level of material comfort that they are able to enjoy in terms of the goods and services which they can buy or use.

Understanding Gross Domestic Product (GDP)

The GDP measures the growth of economies over time.

• It can be used to make comparisons between levels of production, income, and spending between countries.

Limitations of GDP as a Measure

GDP is NOT a good measure for several reasons:

• It doesn't take into account the degree of inequality in a society. Although GDP per head in a country might rise over time, prosperity does not necessarily make much difference to the living standards of poorer people.
• GDP simply measures the value of goods produced; it doesn't take into account

Non-Wage Incentives and Employee Benefits

• Job Satisfaction: The feeling a worker has when they enjoy their job. This feeling is personal to the individual.
• Career Prospects: The opportunity for promotion within a job.
• Fringe Benefits: Non-financial incentives given to employees, such as subsidized housing, payment of school fees, or a company car.

Labor Market Concepts

• The Supply of Labor: Consists of workers actively looking for work.
• The Demand for Labor: Comes from employers seeking workers.

Industry Sectors

• Primary Industry: Extractive industries, including agriculture, livestock farming, fishing, and mining.
• Secondary Industry: Manufacturing and construction.
• Tertiary Industry: Services.

Understanding Trade Unions

A Trade Union is an association of...

Clients, Customers, and Consumers

• Customer: A person who buys a product but is not a habitual client.
• Client: A person who usually buys a product.
• Consumer: A person who uses a product but does not necessarily pay for it.

Consumer Protection

Consumers are at the end of the distribution channel. A consumer purchases a product or service for direct use, not for reselling or for further production. The following stages in the distribution chain of goods from their production to the time they reach the end user.

The manufacturer is the party that makes the product. This is stage 1.

The wholesaler is the intermediary who buys products from the manufacturer and sells them on to the retailer. This is stage 2.

The retailer is the party who sells the product...

Understanding Fair Trade and its Impact

Have you ever come across a food product at the supermarket with a label saying "Fair Trade"? You may have wondered what exactly that means. Fair trade is an arrangement designed to help producers in growing countries achieve sustainable and equitable trade relationships.

The Objectives of Fair Trade

Fair trade has two main objectives: the development of peoples and the fight against poverty. These objectives are based on several pillars:

• Producers must have a minimum wage.
• Workers should not be children.
• Products shall be environmentally friendly.

Consumers pay more attention to the origin of the products they consume. They take into account, for example, how it has been obtained, and they are willing to pay...

Barter

Barter is the exchange of goods and services for other goods and services without using money.

Money

Regardless of the form it takes (e.g., euro bill), money is anything that functions as a medium of exchange, store of value, or standard of value.

Money Supply

Money supply is the sum of the cash money (coins and banknotes).

Monetary Aggregates

Monetary aggregates are broad categories that measure the money supply in an economy, established by the European Central Bank. Monetary aggregates are used to measure the money supply in a national economy.

• M1: Physical paper and coin currency in circulation, plus bank reserves held by the central bank, also known as the monetary base.
• M2: All of M1, plus traveler's checks and demand deposits.
• M3: All of

Applicant (solicitante): A person who applies or requests something; a candidate. Application form (solicitud de): A document to be filled out by an applicant.

Apply for a job (solicitar un trabajo): apply for a position; reply to employment advertisement. Be in charge of (estar a cargo de): having control of (sth); be responsible for.

Be responsible for (ser responsable de). Bonus (sobre sueldo): extra pay. Boss (jefa): manager. Casual job (trabajo temporal): temporary job. Day shift (turno de día): daytime work period.

Dismiss (despedir): sack; fire an employee. Dismissal (despido): the act of being fired from a job. Duties (deberes): job functions / tasks. Earn one's living (ganarse la vida): to earn the money needed for food, clothing, etc....

Core Economic Concepts

Microeconomics: Households and Firms

Microeconomics is the study of the economic system from the perspective of households and business firms.

Macroeconomics: System Performance

Macroeconomics is the study of the overall performance of the economic system.

Economic Growth (EGR)

Economic growth means that the economy is moving towards its full potential output. This is beneficial for the economy because it signifies that people are working and goods are being sold, which in turn stimulates the economy further by creating more jobs. Economic growth is typically presented as the percentage increase in Real GDP.

Gross Domestic Product (GDP) Definition and Measurement

GDP is the total market value of all the final goods and services...

Advantages of Strategic Alliances

Technology Exchange

This is a major objective for many strategic alliances. Many breakthroughs and major technological innovations are based on interdisciplinary and/or inter-industrial advances. As a result, it is increasingly difficult for a single firm to possess the necessary resources or capabilities to conduct its own effective R&D efforts. This is further perpetuated by shorter product life cycles and the need for companies to stay competitive through innovation. Some industries that have become centers for extensive cooperative agreements are:

• Telecommunications
• Electronics
• Pharmaceuticals
• Information Technology
• Specialty Chemicals

Global Competition

There is a growing perception that global battles between...