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

Market Structures

Pure competition is a theoretical market structure with three necessary conditions: very large numbers of buyers and sellers, identical products, and freedom of entry and exit.

Market structure is a classification that describes the nature and degree of competition among firms in the same industry.

Monopolistic competition is a market structure that has all of the conditions of pure competition except for identical products. Because a monopolistic competitor faces competition from a large number of firms in its industry, it must somehow convince consumers that its products are better than the products produced by other firms.

Types of Monopolies

• Natural monopoly: A situation in which a single firm can produce the product more cheaply

Understanding Companies

What is a Company?

A company is a legal entity made up of an association of persons, be they natural, legal, or a mixture of both, for carrying on a commercial or industrial enterprise.

Types of Companies by Economic Sector

• Commercial Companies: Dedicated to buying and selling goods.
• Industrial Companies: Dedicated to producing goods.
• Agricultural Companies: Dedicated to cultivating and raising livestock.
• Extracting Companies: Dedicated to the extraction of riches from the earth.
• Service Companies: Dedicated to offering services.

Types of Companies by Size

• Small Companies: Companies with no more than 20 workers. Examples include grocery stores, restaurants, and bakeries.
• Medium Companies: Companies with less than 100 workers. These

Understanding Economies of Scale

Economies of scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing as the scale increases, because fixed costs are spread out over more units of output.

Types of Economies of Scale

Economies of scale can be broadly categorized into external and internal types, each offering distinct benefits to businesses.

External Economies of Scale: Skilled Labour Pools

When an industry is concentrated in a particular area, it often leads to a significant build-up of skilled labour. This means that businesses can readily find workers with the specific skills and work experience required by that industry. As a result:

• Training costs are lower

Core Business Fundamentals and Economic Concepts

Defining Business and Its Resources

Business

Business is the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs. The term refers to all such efforts within a society. A business is a particular organization that must perform three core activities:

• Be organized.
• Satisfy needs.
• Earn a profit.

Material Resources

These include raw materials used in the manufacturing process, as well as buildings and machinery.

Sales Revenue

The money a business receives from its customers in exchange for goods or services.

Profit

What remains after all business expenses have been deducted from sales revenue.

Economic Principles

Economy

The way in which people...

Understanding Organizations

An organization is a tool used by people to coordinate their actions to obtain something they desire or value, while attempting to fulfill a common goal.

Organizations are a response to and a means of satisfying human needs. They provide goods and services, employ people, and bring together people and resources to produce products. Ultimately, organizations exist to create value.

Why Do Organizations Exist?

People working together to produce goods and services create more value than people working alone. Organizations exist for the following reasons:

• Increase specialization and the division of labor: Division of labor allows for specialization, enabling individuals to become experts at their jobs.
• Use large-scale technology:

What is a Service?

A service is an act of serving others. It requires a relationship between the person or company providing the service and its users. Services can be classified by who provides them and their purpose.

Public Services

Public services are those whose provision is guaranteed by the state.

Private Services

Private services are offered specifically for financial gain.

Service Purposes

Services exist for various purposes, including:

• Commerce
• Financial services
• Transportation
• Tourism-related activities
• Information and communications
• Business support
• State administration
• Social and personal needs

Understanding Trade

Trade refers to the set of activities aimed at exchanging goods and services.

Factors Influencing Trade

• Development of Transport and Infrastructure:

The foreign trade balance. The current imbalances in international trade

China leads the last 20 years growing at an average rate of 10 percent annually and has hardly been affected by the great recession plaguing the world since 2007. It is therefore the main character and now we need the argument, which is none other than economic globalization. China has become the economy grows faster and is helping to further the transformation of economic structures with the opening of goods and capital markets and globalization. China saves 52 percent of the income it generates, while in the U.S. and saving for many years has been 0 percent. The success of China, is to become the world's factory, where export-oriented model. China's success places significant...

Financial Management Area: Resources & Structure

The Financial Management Area (often referred to as TERMS T-12 in some contexts) is responsible for managing and controlling the financial resources used by a company. Its primary objectives include:

• Finding the minimum cost for the financial resources needed to develop productive activities.
• Determining the most appropriate financial structure.
• Selecting necessary investments.

Investment Classifications

An Investment is the deployment of financial resources to purchase property or assets. Investments can be classified in the following ways:

• Current Asset Investment: Short-term assets.
• Financial Investment: Investments in securities or other financial instruments.
• Productive Investment: Investments

1.1 Classification Based on Product Nature

Companies are classified depending on the nature of their products or services:

Industrial Companies

These companies buy raw materials and products from other companies to manufacture a more elaborate product.

Commercial Companies

These intermediary firms buy products and sell them directly to consumers without altering their form or substance.

Utilities

Utilities do not produce or sell physical property; they offer the direct enjoyment of an activity or service (e.g., electricity, water, telecommunications).

1.2 Classification Based on Business Ownership

The role of business ownership determines how capital and means of production are controlled:

• Private Companies: The capital is held in private hands. These

Key Tax Definitions

Income Earned

Income earned refers to revenue to which an individual or entity has a legal right, regardless of whether it has been physically received or is currently due. It represents a credit to their title.

Income Received

Income received is revenue that has physically entered the assets or estate of an individual or entity.

Minimum Presumed Income

Minimum presumed income is a statutory amount of income attributed to a taxpayer that is not subject to any deductions.

Effective Capital

Effective capital represents the total assets of an entity, excluding values that do not represent actual investments. This includes intangible, nominal, transient, and order accounts.

Partnership Company

A Partnership Company refers to companies...