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

Import Quota Effects

3) An import quota will increase producer surplus, decrease consumer surplus, have no effect on government revenue, and have an ambiguous effect on overall domestic national welfare.

C) increase; decrease; have no effect on; have an ambiguous effect on

Voluntary Export Restraint Effects

4) A voluntary export restraint will increase producer surplus, decrease consumer surplus, have no effect on government revenue, and decrease overall domestic national welfare.

D) increase; decrease; have no effect on; decrease

Export Tariff Effects with Imperfect Competition

1) If an import-competing firm is imperfectly competitive, then under free trade an export tariff will increase domestic market price, have no effect on producer surplus,

Cost Leadership

Requires a set of interrelated tactics, including:

• Aggressive construction of efficient-scale facilities
• Pursuit of cost reductions from experience
• Tight cost and overhead control
• Avoidance of marginal customer accounts
• Cost minimization in all activities in the value chain, such as R&D, service, sales force, and advertising
• Parity in differentiation with competitors

PITFALLS: lack of parity in differentiation, reduced flexibility, obsolescence

PRIMARY: EFFECTIVE

SECONDARY: todo lo que reduzca coste.

Transaction Processing Systems (TPS)

• Basic business systems that serve the organization's operational level
• Input: transactions (invoice, order, payroll), events
• Processing: Sorting, listing, merging, updating
• Output: detailed reports, lists,

What is not strictly foreign currency?

b) Bills of exchange, promissory notes, and bank notes in foreign currency.

How can a foreign currency market maker orient quotes?

a) Orient USD/EUR quotes towards selling EUR, buying them and selling them cheaper than competitors.

In the formula i F = (T F - T 0 / T 0 ) * (360 / t):

b) T 0 = cash exchange rate, T F = forward exchange rate, t = time in days.

What does Interest Rate Parity Theory establish?

c) Equality between the appreciation or depreciation of a currency's future exchange rate relative to a reference currency, and the interest rate differences between those currencies.

Currency SWAP operations:

b) Principal amounts are exchanged at the beginning and end, or only at the end of the swap.

Differences

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

Components of International Economic Accounts

Factor Income and Receipts

The Factor Income consists largely of payments and receipts of interest, dividends, and other income generated on foreign investments that were previously made.

Unilateral Transfers Defined

Unilateral Transfers, the final category of the Current Account, are one-way payments that do not require a counter-compensating monetary action. Examples include:

• Foreign aid and reparations
• Official and private grants
• Donations and gifts

The Capital Account Structure

The Capital Account includes all purchases and sales of assets such as stocks, bonds, bank accounts, real estate, and businesses. It measures the difference between a country’s sales of assets (e.g., US, Colombia) to foreigners...

What is Negative Business Power?

Negative business power is something an organization acquires by obtaining immense wealth, knowledge, and technology within a country. Such power can cause trouble for both the company and the country. Therefore, the government should take necessary steps to regulate business power, preventing it from emerging as negative business power.

Differences Between Direct and Indirect Expenses/Costs

1. Direct Expenses/Costs

The value of the components, parts, or materials used during the income period.

2. Indirect Expenses/Costs

Expenses that cover the indirect costs of production during the income period. Examples of indirect expenses include transport costs (petrol/repairs), marketing costs (advertising), and administration...

2(a)(i) Shareholders

2(a)(ii) Total Costs Increase

10,000 x 50HKD = 500,000 HKD

20,000 x 40HKD = 800,000 HKD

2(a)(iii) Profit Calculation

TR - TC = Profit

200,000 HKD

2(b)(i) Economies of Scale

Economies of scale mean that as output increases, cost per unit falls. So in Table 2A, we can observe how output increases from 10,000 to 20,000 and average cost falls from 50HKD to 40HKD.

2(b)(ii) Factors Contributing to Economies of Scale

• Bulk Buying: Can result in per-unit costs of raw materials falling.
• Division of Labor: Involves employing specialist employees to do specialist work. The production manager cannot do all of the work of the production department themselves.

2(b)(iii) Limiting Factor to Expansion

Lack of Finance: Banks may not loan money to small...

Location Factors

Market Access: Locations near consumer and foreign markets are decisive.

Communication Options: Easy market access and modern telecommunications are favored.

Labor Quality and Quantity: A well-prepared population offers advantages in technology and resource management.

Physical-Geographical Factors: Industrial centers locate near raw materials and advantageous geographical features like navigation channels.

Historical Factors: Early settlements and major population centers attract industrial locations.

Reserves

Currency deposits held by the Central Bank of Venezuela.

Trade

The result of population agglomeration and economic surplus.

Industrialization Stages

Import Substitution: Tax exemptions for domestic industries to supply growing...

Consumer goods provide immediate and direct satisfaction. For example, a person needs food and drink. Means of production directly satisfy needs and are useful in producing consumer goods. For example, to produce consumer goods like clothing, you need means of production like wool and sewing machines.

Nondurable goods are used only once and consumed in that application, such as food. Durable goods can be used repeatedly. They wear down with use, such as clothes or a car. Capital goods are durable and used for production and consumption.

Raw Materials and Finished Goods

A finished product is suitable to meet needs, such as edible fruits. A raw material is used as the initial element of a process, such as wood, wool, or cotton. Semi-finished products...