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

Goods and Services

Who Produces Goods and Services?

Individuals with specific skills tend to be more productive. Specialization is key to efficient production and acquisition of goods and services.

Why Specialization?

The division of labor and exchange promotes productivity.

Factors of Production

• Earth
• Labor
• Capital

These factors combine to generate natural resources (raw materials), which are then transformed into finished products. The ultimate goal of production is profit.

Capital

Capital encompasses machinery, manufactured goods, large-scale plants, and inventories of finished and unfinished materials (excluding human resources).

Natural Capital

Natural resources are considered natural capital when they become a source of profit.

Human Capital

Human capital... Continue reading "Production, Economic Factors, and Agents" »

Economic Consequences of Unemployment

• Decreased aggregate demand.
• Increase in the public deficit.

Social Effects of Unemployment

• Negative psychological effects.
• Discrimination.

Factors Influencing Unemployment

• Demographic factors.
• Technological changes.
• Openness to international trade.
• Phase of the economic cycle.

Policy to Combat Unemployment

• Act on the Aggregate Demand (DA).
• Act on the Aggregate Supply (OA).

9.5. The Economic Cycle

The economic cycle involves fluctuations in Gross Domestic Product (GDP) and employment, driven by factors leading to expansion and recession.

Phases of the Economic Cycle

• Expansion
• Peak
• Recession
• Trough (Background)

10.1. State Intervention in the Economy

Keynesian Economists

Followers of J.M. Keynes:

• They reject the hypothesis that

Tourism: Advantages and Disadvantages

Tourism involves tourists traveling outside their usual environment to experience other cultures for leisure, business, or other purposes.

Advantages of Tourism

• Family Integration: Tourism fosters dialogue and unity within families.
• Natural Resource Utilization: Tourism showcases natural resources, creating new attractions.
• Tourist Security: Enhanced security measures increase tourist confidence.
• Conservation: Preservation of historical and tourist sites protects cultural heritage.
• Job Creation: Tourism projects generate employment opportunities.

Disadvantages of Tourism

• Cultural Loss: Communities may experience cultural erosion due to changing environments.
• Environmental Pollution: Poor management can lead to pollution,

The Principle of Scarcity

The principle of scarcity states that human needs are unlimited while the resources at our disposal to meet those needs are scarce and have alternative uses. This concept is studied through the Production Possibilities Frontier (PPF), which consists of all those combinations of products that optimally use the amount of resources a country possesses.

Graphic Representation of the PPF

• Efficient: These points are on the curve itself; you obtain the maximum amounts of product with the resources the country possesses, utilizing them at 100%.
• Inefficient: These points are below the curve; at these points, not all resources a country possesses are used, meaning there will be idle resources.
• Unattainable: These points are above

What is Economic Activity?

Economic activity is any process through which we obtain products and services that meet human needs. It encompasses three stages:

• Production
• Distribution
• Consumption

Economic Sectors

The economy is divided into three main sectors:

• Primary Sector: This sector involves obtaining raw materials from nature (e.g., farming, mining, fishing).
• Secondary Sector: This sector transforms raw materials into finished products (e.g., manufacturing, construction).
• Tertiary Sector: This sector provides services to society (e.g., healthcare, education, finance).

Gross Domestic Product (GDP) and GDP Per Capita

GDP is the total value of goods and services produced in a territory within a year.

GDP per capita is calculated by dividing the GDP of... Continue reading "Understanding Economic Activity and Systems" »

Factors Influencing Price Determination

Base or list price: Refers to the unit price of the product at its point of production or resale. It does not reflect discounts, freight charges, or other adjustments, including allocation for a price leader.

Setting a price for an established product is generally less difficult than pricing a new product.

Estimating Demand

Key steps include:

1. Determine if there is a market-expected price.
2. Estimate potential sales volume at various price points.

Note:

• This is usually expressed as a price range rather than a specific amount.
• Intermediaries should be considered; it is easier to promote products if they align with their pricing expectations.
• Setting a price much lower than market expectations can lead to lost sales.

Gross Domestic Product (GDP) Components

GDP can be measured using different approaches:

Expenditure Approach

This approach sums up all spending on final goods and services in an economy. Key components include:

• Consumption: Household spending on goods and services.
• Investments: Business spending on capital goods, inventories, and structures.
• Government Spending: Government expenditures on goods and services (domestic demand).
• Net Exports: Exports minus Imports (external demand).

Income Approach

This approach sums up all income earned from the production of goods and services, often referred to as the income approach to production or added value.

GDP and Economic Well-being: Limitations

While GDP is a widely used economic indicator, it is not a perfect... Continue reading "Macroeconomic Essentials: GDP, Welfare, and Capital Markets" »

Conditions of Supply

• Product/Service Price, Quality, and Delivery Times

• Policy Provider Stocks

  (Including customer deposits)

• Minimum Orders for Products and/or Delivery

  (Effect of transport)

• Type and Mode of Transport

  (Who manages?)

• Contact and Delivery Addresses

• Inter-Agency Partners

  (Including transportation, logistics operators, etc.)

• Date and Schedules

  Discharge Planning

  (Time windows)

• Packaging and Palletization

• Coding, Identification, and Related Documents

• Batch Management and Disqualifications

  (Traceability)

• Special Conditions of Product Conservation

• Rejection Criteria

  (Defined tolerances on price, quality, deadlines, quantities, references, etc.)

• Incident Procedure, Returns Due to Rejections

  (What to do with the product, who collects, what penalties

The Genesis of Modern Currency

With the decline of feudalism in Europe, markets began to organize and expand. Keeping gold at home became dangerous, leading to the emergence of specialized houses, often run by goldsmiths, that held gold securely. In exchange for deposited gold, people received certificates, which soon gained an equivalent value to the gold itself. Gradually, individuals stopped withdrawing their physical gold, relying solely on these certificates for transactions. This evolution marked the precursor to modern banking systems.

From Commodity to Symbolic Money

The pivotal moment when currency transitioned from a commodity to a mere symbol occurred when its exchange value surpassed its intrinsic use value. In this symbolic form,... Continue reading "Understanding Money: History, Systems, and Inflation" »

Consumer-to-Consumer

This business model focuses on transactions between consumers, often facilitated by an intermediary company that connects supply and demand for goods or services.

Chain Stores

These retail organizations operate multiple stores with a standardized product mix and centralized control.

Visit Analysis

This analysis optimizes vendor activity by examining the types of visits made to customers.

Visit Reports

Written reports summarizing customer visits.

Distribution Channels

The paths that products or services take from manufacturer to consumer.

Human Capital

The value of an individual's skills and talents.

Boxed Offers

Manufacturers offer discounts to wholesalers who purchase products by the box rather than individually.

Cow Milk

A product with... Continue reading "Consumer-Centric Business Strategies & Tactics" »