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

Financial plan(planning)- process of managing your money to achieve personal economic satisfaction

Financial plan incorporates:

1.Formalized report-follows proper procedures, orderly,endorsed

2. Summarizes current financial situation-Now the way it is

3.Analyze financial needs- need to purchase for ?

4. Recommends future financial activities

5.Measure progress toward financial goals

STEPS FOR FORMAL FINANCIAL PLAN

1. Determine financial condition

2. Develop financial goals→ time frames

3. Develop courses of action-compare bettween different options, compare at risk and return, decide contionue or change course

4. Create and implement financial action

5. Review and revise as needed

6. semi-anually, annually, life changing event

Effective financial planning goals must be,

Market Structures & Strategic Interactions

Monopolistic Competition

A market in which firms can enter freely, each producing its own brand or version of a differentiated product.

Characteristics of Monopolistic Competition

• Firms compete by selling differentiated products that are highly substitutable for one another but not perfect substitutes. In other words, the cross-price elasticities of demand are large but not infinite.
• Free entry and exit.

Oligopoly

A market in which only a few firms compete with one another, and entry by new firms is impeded. In some oligopolistic markets, some or all firms earn substantial profits over the long run because barriers to entry make it difficult or impossible for new firms to enter.

Cartel

A market in which... Continue reading "Market Structures & Game Theory: Key Economic Concepts" »

Oligopoly Market Analysis

Defining Oligopoly and Market Concentration

Market Share Data

The combined market share of the four largest grocery firms is 76%.

Oligopoly Definition

An oligopoly is a market structure where a few large firms dominate the market.

Competitive Strategies in Oligopolies

Price Competition Tactics

Price competition occurs when a firm reduces prices to gain customers from rival firms or to make goods more affordable. Examples include:

• Reducing the base price.
• Offering special deals (e.g., Buy One Get One Free (BOGOF) offers).

Non-Price Competition Methods

Firms utilize non-price competition to attract and retain customers without lowering prices. Methods include:

• Advertising and marketing campaigns.
• Using loyalty cards to encourage repeat

Dumping And Anti-Dumping Duties

The Period Leading Up to the 2008 North Atlantic Crisis

The 2008 crisis started in the US and then spread to the rest of the world. This was because there was an intense relationship between the US’s shadow banking and the European banks – European banks were financing the American private sector.

The European Union

A crucial factor was the massive expansion of the European banking system (1985-2002).

Megabanks contributed significantly to housing price bubbles and financial bubbles.

The Maastricht Treaty decided to keep responsibility for supervising and rescuing banks at the level of individual member countries rather than centralizing it at the union level.

The United States of America

The Vietnam War and the oil price shocks led to rising... Continue reading "Understanding the 2008 Financial Crisis: Causes and Restructuring" »

Accounting Notes

Profitability Ratios

These measures indicate how much profit a business has generated. When analyzing these, always compare figures over time to determine growth or decline.

• Gross Profit (GP) %: Measures the amount of GP made on sales. Analyze whether the figure has increased or decreased and explain the impact on the business. Consider factors like the quantity of sales, bulk purchasing, and supplier relationships.
• Operating Profit (OP) %: Measures the amount of OP made on sales after deducting administration and distribution expenses. An increase is a positive sign of expense control, while a decrease suggests rising costs.
• Return on Capital Employed (ROCE) %: Evaluates the success of a business in generating satisfactory profit

CHAPTER 1

4) To participate in a supply chain, a firm must actually handle the physical goods at some point.

7) Inputs to the transformation process are tangible, but the outputs may be tangible or intangible.

9) Of the three flows linking organizations in a supply chain, information and monetary flows always move upstream and physical flows always move downstream.

10) A second-tier supplier is downstream from a first-tier supplier in the supply chain.

13) The drive for efficiency has decreased the level of globalization in the world economy over the last twenty years.

14) E-commerce is the component of a supply chain that is the most susceptible to breakdown.

15) To avoid supply chain problems, firms must manage relationships with their downstream... Continue reading "Key Concepts in Supply Chain and Operations Management" »

Understanding the Category Life Cycle

Categories are defined as groups of products and brands where consumer behaviors are collective. The life cycle follows four distinct stages:

1. Introduction: The Barely Known Category

Opening a category means the product is entirely new, driven by innovation. At this stage, the product itself is more important than the brand. There is no direct competition, and the market segment is not yet clearly defined. The primary purchasers are early adopters.

2. Growth: The Secure Category

This stage occurs when consumers recognize, understand, and fully accept the product. While direct competition is limited because rivals often target different segments, overall competition increases. This phase requires significant... Continue reading "Category and Brand Life Cycle Management" »

The Economic Landscape of the 1920s

Post-War Boom and Depression (1919–1921)

• 1919–1920: Post-War "Boom" – This period was characterized by a short and abrupt increase in prices, repressed demand, scarce supply, and accumulated savings. This brief boom had beneficial effects, particularly in increasing employment.
• 1920–1921: Post-War Depression – This phase involved the conversion costs of transitioning from a war economy to a peace economy. Falling prices made the payment of allied debts difficult, leading to increased production and a deflationary process. Furthermore, the contraction of American foreign credit reduced the availability of capital, resulting in chronic unemployment, restrictions on immigration, and a return to protectionism

Understanding Power Sharing

Horizontal Distribution of Power

Power is shared among different organs of government, such as the legislature, executive, and judiciary. This is called horizontal distribution of power because it allows different organs of government placed at the same level to exercise different powers.

Such a separation ensures that none of the organs can exercise unlimited power. Each organ checks the others, resulting in a balance of power among various institutions. For example, although judges are appointed by the executive, they can check the functioning of the executive or laws made by the legislatures. This arrangement is called a system of checks and balances.

Vertical Division of Power

Power can also be shared among governments... Continue reading "Understanding Power Sharing and Employment Generation Strategies in Government" »