Notes, summaries, assignments, exams, and exercises for Economics for Secondary education

Types of Advertising Agencies

There are many ways to classify advertising agencies. They can be classified according to:

• Scope: National and International
• Type of service they offer:
  • Advertising agencies proper.
  • Full-Service Agencies, Creative Boutiques.
  • Media Agencies
  • Specialized agencies (Promotions, Direct Marketing, Viral Marketing, Public Relations, Press Office, etc.).
  • Exclusive Agencies

Services Offered by Agencies

Agencies can offer all or some of the following services:

• Creativity: This is the core of their service, their reason for being.
• Marketing consultancy.
• Complementary services: promotional communication, direct marketing, merchandising, events, etc.
• Management of audiovisual, graphic, and event production.
• Planning and buying media.
• International

The work of the Human Resources department

We all know that recruitment and selection is one of the tasks that the HR department fulfills. The other tasks will be discussed below:

• Recruitment and selection: Involves selecting and attracting the best workers.

Wages and salaries: Must be enough to motivate or attract workers.
Industrial relations: There must be effective communication between departments.
Training programmes: Must meet the training needs of employees and accomplish business objectives.
Health and safety: Must do things according to the law.
Redundancy and dismissal: Must obey all laws when firing workers.

Recruitment and selection

Workers are needed when a business starts up, expands or an existing employee leaves. Businesses use the...

Perfect Competition Properties

• P=MR
• Many Producers
• Homogeneous Product
• Many Buyers
• Price Taker
• Complete Knowledge of Input and Producer Prices
• Easy Entry and Exit

Monopoly Properties

• Heterogeneous Product
• One Producer
• Many Buyers
• Difficult Entry
• Producers Decide Price

Monopolistic Properties

• Many Buyers & Producers
• Slightly Differentiated Products
• Good Substitutes
• Easy Entry and Exit
• Producers Decide Prices

Oligopoly Properties

• Small Number of Firms
• Homogenous or Heterogeneous Product
• Price Decided by Firms
• Non-Price Competition

Optimum Output Conditions

TP= TR-TC, TP Slope = Derivative TP/ Derivative Q, if = 0 Profit is Maximum, MR=MC

1. MR=MC
2. Rising MC
3. P=Minimum AC
4. Zero Economic Profit

Slope MR is Horizontal, Per Unit Profit = P –AC, Total Profit = (P-AC)Q

Profit Situation=...

Essential Economic Concepts

• Scarcity: Limited resources, unlimited wants.

• Economics: The study of choices made due to scarcity.

• Economic Problem: The challenge of allocating scarce resources.

• Goods and Services: Goods are tangible items; services are actions or activities.

• Resources:

  • Natural: Raw materials.

  • Human: Labor.

  • Capital: Tools and machines used in production.

  • Entrepreneur: A risk-taker and innovator.

  • Productive Resources: All the above combined.

• Opportunity Cost: What is given up when choosing one alternative over another.

• Specialization: Focusing on a specific task to achieve greater efficiency.

• Production Possibilities Frontier (PPF): Illustrates trade-offs and efficiency.

Economic Systems

• Traditional Economy: Based on custom and historical practices.

Chapter 15

Which one of the following statements is the MOST accurate?

D) A rise in the average value of transactions carried out by a household or a firm causes its demand for real money to rise.

If there is initially an

B) excess supply of money, the interest rate will fall, and if there is initially an excess demand, it will rise.

Which one of the following statements is the MOST accurate?

D) An increase in the money supply lowers the interest rate while a fall in the money supply raises the interest rate, given the price level and output.

An increase in

E) real output raises the interest rate while a fall in real output lowers the interest rate, given the price level and the money supply.

The aggregate real money demand schedule L(R,Y)

D) slopes...

Income Statement: Financial Performance

Measures a company's financial performance over a specific period of time.

• Revenue: First amount on right (credit)
• Expense: Second amount on left (debit)
• Revenues - Expenses = Net Income
• If net income is negative, it is called a Net Loss.
• Net income is allocated to either Dividends or Retained Earnings.

Retained Earnings: Company Profits

Represents the portion of net income that the firm has kept (as opposed to paying out as dividends).

• Ending Retained Earnings (ERE) = Beginning Retained Earnings (BRE) + Net Income (NI) - Dividends
• In a Statement of Stockholders' Equity, it would include common stock: ERE = BRE + Common Stock (Owner Contribution) + NI - Dividends

Balance Sheet: Financial Position Snapshot

Reports...

Timeliness Principle

The Timeliness principle in accounting refers to the need for accounting information to be presented to users in time to fulfill their decision-making needs.

• Example: Users of accounting information must be provided financial statements on a timely basis to ensure that their financial decisions are based on up-to-date information. This can be achieved by reporting the financial performance of companies with sufficient regularity (e.g., quarterly, half-yearly, or annually) depending on the size and complexity of the business operations. Unreasonable delay in reporting accounting information to users must also be avoided.

Prudence Principle

Prudence requires that accountants should exercise a degree of caution in the adoption...

Peppers and Rogers described different steps that are involved in evaluation.

PepsiCo experienced great success in Latin America with its leverage; experience gained in one country can be used in another country.

Product placement has reached the world of live: viewers are being marketed to subliminally without their consent.

Promotions designed to increase product availability in distribution include trade sales promotions.

Red Bull has been involved in Music Academy relationship marketing, which is crucial for brand engagement.

Social couponing is one of the hottest online sales promotion trends, especially with platforms like Groupons.

Some advertisers acknowledge that, in Brazil, the market dynamics are unique.

Spoexa, a food-marketing company,...

Unit 2

1. Market Types: Understanding the Differences

Differences between the current market, potential market, objective market, and product-market.

• Current market: The demand for a specific product.
• Potential market: The maximum number of potential buyers.
• Objective market: The market a company targets with its products.
• Product market: Products regarded as substitutes.

2. Types of Markets Based on Competition

Types of markets according to the number of competitors.

• a) Monopoly
• b) Oligopoly
• c) Monopolistic Competition
• d) Perfect Competition

3. What is a Franchise?

What is a franchise? (Que es una franquicia?) A franchise is a contractual relationship that covers a wide range of service provisions, goods supply, leasing of a commercial name or brand on...

Fiscal Policy

Stimulus

• Purchasing more goods and services (G + N + S)
• Lowering taxes (individual income tax cut, corporate tax cut)
• Increasing income transfers

Restraint

• Decreased government spending (AD = FR = induced decrease)
• Increased taxes
• Reduced income transfers

Classical Economics

1. Supply creates its own demand
2. Excess income should be matched by an equal amount of investment by businesses
3. Interest rates, wages, and prices should be flexible
4. The market is always clear because prices would adjust through the interactions of supply and demand

Keynesian Economics

1. At macroeconomic equilibrium, the economy would experience neither full employment nor price stability
2. Even if the market's macroeconomic equilibrium were perfectly positioned, it would not last
3. Macroeconomic