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

Marketing Management

1. Marketing Concept – is the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs.

Market orientation to Customer needs.

2. Porter’s 5 forces – theory based on the concept that there are five forces that determine the competitive intensity and attractiveness of a market. P5F help to identify where power lies in a business situation.

Competition (Supplier Power, Threat of new entry, Buyer power, Threat of substitute product)

Examples: 1) Supplier power, such as "switching" costs, availability of alternative suppliers, degree of labor solidarity, and the sensitivity of selling price to supply costs.

2) Threat of new entry, such as barriers to entry (i.e. patents,... Continue reading "Marketing Management and Consumer Behavior" »

CHAPTER 14: Material Requirements Planning (MRP)

Independent vs. Dependent Demand

Independent Demand

Finished goods, such as computers, have independent demand, meaning their demand is uncertain and influenced by external factors.

Dependent Demand

Components of finished products, like computer parts, have dependent demand, meaning their demand is certain and directly related to the demand for the finished product.

What is Material Requirements Planning (MRP)?

Material Requirements Planning (MRP) is a dependent demand technique that uses a bill-of-material, inventory data, expected receipts, and a master production schedule to determine the materials and components needed to produce finished goods.

Benefits of MRP

• Better response to customer orders
• Faster

1- Intermediaries: Buy products from manufacturers and resell them to consumers.

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,

Three Types of Foreign Direct Investment (FDI)

Foreign Direct Investment can be categorized into three main types:

• Market Seeking: FDI is driven by the desire to be closer to customers. Proximity reduces transportation costs and potentially tariffs. Firms weigh the benefits of FDI against exporting, where production is concentrated in one location.
• Efficiency Seeking: Upstream and downstream products are manufactured in different locations, leveraging factor intensity and factor prices. This strategy aims to optimize production costs.
• Resource Seeking: FDI provides access to scarce resources. Output from resource-seeking FDI is seldom sold in the host country market.

Consequences of FDI for Host Countries

FDI can have several effects on host countries,... Continue reading "Foreign Direct Investment, Trade Theories, Barriers" »

Assignment 5

Macroindicators

Goods and services – GDP, Labor – Unemployment, Capital – Inflation.

Mercantilism

Based on the principle that the world's wealth was static, nations attempted to accumulate the largest possible share of that wealth by maximizing their exports and by limiting their imports via tariffs.

WTO

International institution that oversees global trade rules among nations.

HeckscherOhlin Model

Evaluates the equilibrium of trade between two countries with varying specialties and natural resources.

Leontief Paradox

Capital-abundant countries export labor-intensive goods and labor-abundant countries export capital-intensive goods.

GDP

Monetary value of all finished goods and services made within a country during a specific period.

Inflation

Rate... Continue reading "Understanding Global Economics: Trade, Currency, and Development" »

C. Placement: Where to Distribute the Product

When a firm produces a narrow assortment of products in large quantities, intermediaries play a crucial role in matching supply and demand. They achieve this by purchasing large quantities from producers and breaking them down into a broader assortment of smaller quantities to meet consumer demand for variety and convenience.

Distribution Channel

A distribution channel is a network of interdependent organizations that collaborate to make a product or service accessible for use or consumption by consumers or businesses.

Functions of Channel Members:

1. Information: Gathering and distributing information about consumers, producers, and market forces to facilitate planning and exchange.
2. Promotion: Developing

Economic Expectations

Economic expectations are assumptions people make about the future. They guide individuals, businesses, and governments in their decision-making processes. Companies analyze their own situation, their competitors, and the economic climate to adapt their strategies. This includes investment and production decisions, which can shift the supply curve.

Industrial Structure

In developed countries, most people work in the tertiary sector (services), while manufacturing and agriculture are less prominent. This pattern differs in emerging and non-developed countries.

GDP and Economic Well-being

Gross Domestic Product (GDP)

GDP measures the total value of goods and services produced in an economy annually, indicating its size and evolution.... Continue reading "Economic Indicators and Global Development Trends" »