Notes, summaries, assignments, exams, and exercises for Economics for University

Inventory Processing Costs

Processing costs of inventories include costs directly related to those units produced, such as direct labor. They also include systematically calculated indirect costs, both variable and fixed, which have been incurred to transform raw materials into finished products.

Systems for Cost Valuation

Systems for determining the cost of inventories, such as the standard cost method or the retail method, may be used for convenience if the results approximate the actual cost. Standard costs are established using normal levels of consumption of raw materials, supplies, labor, efficiency, and capacity utilization. In this case, calculation conditions are reviewed regularly and, if necessary, the standards are updated whenever...

Production Theory: Short-Run vs. Long-Run

What is the difference between the short-run and the long-run from the perspective of production theory?

In the short run, only labor varies, and in the long run, both labor and capital vary.

Profit Analysis: Accounting vs. Economic

Accounting profit is ________ compared to economic profit, because accountants ________ opportunity costs in their calculations.

Bigger; do not consider.

Profit Maximization Strategies

A firm will maximize profits when:

The difference between Marginal Revenue and Marginal Cost is the greatest.

If a competitive firm is producing a level of output where marginal revenue exceeds marginal cost, the firm could increase profits if it:

Increased production.

In order to maximize profits, a

What is an ethical dilemma in a company?

One knows when they have a significant ethical conflict when there is a presence of:

• Significant value conflicts among differing interests
• Real alternatives that are equally justifiable
• Significant consequences on stakeholders in the situation

An ethical dilemma exists when one is faced with having to make a choice among these feasible, comparable, and relevant alternatives.

Social Marketing Concept:

Market Sentiment

• Bullish: Share prices are rising, and confidence is high.
• Bearish: Share prices are dropping, and confidence is low.

Financial Metrics and Accounting

• COGS vs. Operating Expenses: COGS (Cost of Goods Sold) is the carrying value of goods sold during a period. Operating expenses are ongoing costs for running a product or service.
• EBIT vs. Net Income: EBIT measures profit including all income and expenses except interest and taxes. Net income is a company's total income minus the cost of goods sold.
• Retained Earnings: The accumulated net income of a company retained at a specific point in time.
• Shareholder's Equity: Represents the net value of a company (Total Assets minus Total Liabilities). It is a key metric for determining financial

Economic Liberalism

Humans act rationally to maximize self-interest.

• When individuals act rationally, markets develop to produce, distribute, and consume goods.
• Markets enable individuals to carry out necessary transactions to improve their own welfare.
• If there are many buyers and sellers, competition ensures prices as low as possible.
• Low prices mean increased consumer welfare.
• Markets must be virtually free of government interference.

Pro-market interventionism: When governments step in to create the conditions for markets to function.

Note: Laissez-faire economic policy was not favored by Adam Smith, contrary to common belief.

Later versions posit both economic and political advantages: economic wealth comes with the formation of an international...

Chapter 9.1: Introduction to International Political Economy

Expanding membership—cultural criteria and institutional workability

• What makes a country “European”?
• Wealth gap: Luxembourg $102,000 vs. Moldova $1,900
• Comparison: Massachusetts $65,000 vs. Mississippi $31,800

The study of the interactions between states and markets in an increasingly globalized world.

What is Globalization?

The process of increasing integration of the world in terms of economics, politics, communications, social relations, and culture.

Increasingly seen as undermining traditional state sovereignty.

Mercantilism

• 15^th–18^th Century: European states dedicated to pursuit of economic wealth
• Encourage exports over imports
• Industrialization over agriculture
• Protect domestic

Strategic Approach to International Marketing

Internacionalizacija i globalizacija međunarodnih tržišta i konkurencija, Brz tehnološki razvoj, Skraćenje životnog ciklusa proizvoda, Sve teže ofržavanje konkurentske prednosti, Ekonomske integracije stranih tržišta, Višak punude nadpotražnjom > povećana moć kupaca i potrošača, Trgovci smanjuju broj dobavljača

Macroeconomic Environment

Ekonomski sustav, BDP, Stanovništvo i prihodi, Koncepcija ekonomskog napretka, Struktura potošnje infrasturuktura ostali pokazatelji

Hofstede

Hijerarhijska distanca, Individualizam i kolektivizam, Ženstvenost i muževnost, Izbjegavanje nesigurnosti, Kratkoročna i dugoročna orijentacija

Political Risk

Rizik opće nestabilnosti, neizvjesnost budućih...

Business Structures and Employee Motivation

Businesses come in many guises, from the lonely-sounding self-employed person and sole trader, through the SME (small to medium-sized enterprise), to the multinational with its hierarchy and tens of thousands of employees. However, the questions about what motivates people are basically the same everywhere.

The first question that self-employed people are asked is how they find the self-discipline to work alone and motivate themselves when there is no one telling them what to do. Some companies also seek this trait; job advertisements often talk about the need for recruits to be self-starters. Some organisations, like advertising agencies, want to find ways of motivating their people to be ever more...

1. Market Segmentation: The Foundation of Promotion

The first step in the process of product promotion is Segmentation. Market Segmentation is the division of a broad market into smaller segments comprising individuals who share similar characteristics, needs, and interests, and show inclination towards similar products and brands.

This process involves creating small groups (segments) within a large market to bring together consumers who have similar requirements and interests. The individuals in a particular segment respond to similar market fluctuations and often require identical products. In simpler words, market segmentation can also be called Grouping.

Examples of market segments include:

• Kids form one segment.
• Males can be part of a similar