Notes, abstracts, papers, exams and problems of Economy

Travel Agencies

Definition and Functions

A travel agency is a business that sells travel services like tours, cruises, transportation, accommodation, meals, and sightseeing to the public. It utilizes management practices such as division of labor and hierarchical authority to achieve its objectives, including customer satisfaction and profit generation. Acting as a representative of airlines, hotels, tour companies, and cruise lines, travel agencies cater to both leisure and business travelers.

Expert Advice and Packages

Travel agents provide valuable advice to tourists regarding climate, local culture, customs, and other essential information. They also play a key role in selling package holidays, drawing inspiration from pioneers like Thomas... Continue reading "The Role of Travel Agencies and Tour Operators in the Tourism Industry" »

Crafting Effective Paragraphs

Organizing Your Ideas

Categorization: One effective way to organize your ideas is by sorting them into categories. If an idea doesn't fit, set it aside for later. As you sort, new ideas may emerge; include them if they are relevant. Consider how one writer organized her thoughts on the topic: "I always liked my aunt Alicia best."

Writing Paragraphs

Each paragraph should revolve around one central, controlling idea, often expressed in a topic sentence. Supporting details then develop this main idea by providing evidence, clarification, or elaboration.

Topic Sentences

A topic sentence can be a statement or a question. Regardless of its form, a good topic sentence clearly conveys the main idea and engages the reader. Your... Continue reading "Crafting Effective Paragraphs: A Guide to Organizing Your Ideas" »

Definition of Economics

Wealth Definition, Welfare Definition, Scarcity Definition, and Growth Definition

Managerial economics focuses on applying business principles and methodologies to decision-making within a firm or organization, particularly under uncertainty. It aims to establish rules and principles that help achieve desired economic outcomes related to costs, revenue, and profits, which are crucial for both business and non-business entities. Managerial economics explores how to effectively allocate scarce resources to achieve managerial goals.

Objectives

The primary objective of managerial economics is to analyze and solve economic problems faced by businesses. Other key objectives include:

1. Integrating economic theory with practical business

Inflation

Inflation is an increase in the average level of prices of goods and services.

Types of Inflation

• Demand-Pull Inflation: This occurs when various factors increase aggregate demand, leading to inflation.
• Cost-Push Inflation: This is a decrease in the supply of goods caused by an increase in the cost of production.

Causes of Inflation

• Increase in the cost of raw materials
• Increase in the cost of inputs (land, labor, capital)
• Increase in the cost of borrowing by producers
• Natural calamities, floods, earthquakes

Consequences of Inflation

• Price effect: Consumer consumption will go down.
• Income effect: Real income may decrease.
• Saving effect: Consumer saving declines.
• Wealth effect: The value of assets like land, cash, stocks, bonds, and bank deposits

Delegation of authority is the result of:

• the firm’s growth
• more complex decisions

Delegation and empowerment are essential skills for effective managers. Although the terms are sometimes used interchangeably, there are several areas of difference between them:

• Delegation is a straightforward means of assigning tasks to your employees.
• Empowerment seeks to give an employee more authority with the aim of developing employee commitment, enthusiasm, and expertise, while encouraging innovation that will benefit the organization over time. Empowerment necessarily requires some level of delegation, but not all instances of delegation will produce an empowered employee.

Responsibility: The obligation, placed on employees through delegation, to perform... Continue reading "Delegation of Authority and Empowerment in Management" »

The Model of Valuation of Financial Assets by the Arbitrage Pricing Theory

Stephen Ross developed this theory in 1976. It is an equilibrium model for asset valuation. Its central idea is the expected return on an asset must be a linear function of its systematic risk. The APT considers that the only risk that the market is willing to remunerate is the systematic one, since the rest of the risk can be eliminated via diversification. According to this model, the systematic risk is the fundamental explanatory factor of the performance of the profitability of financial assets, although that is not measured only by the beta coefficient of the profitability of an individual asset with respect to the profitability of the market portfolio, but by a... Continue reading "Understanding the Arbitrage Pricing Theory for Financial Asset Valuation" »

Understanding Credit, Debt, and Insurance

Credit Rule of Thumb: Product should outlive its payment; don't use credit if the purchase is beyond earnings capability.

Factors That Influence Credit Score:

• Billing history (35%)
• Length of bill payment history (15%)
• Amount owed (30%)
• New credit lines (10%)
• Types of credit (10%)

FICO Score:

300-850; above 800 is great; below 620 is not good (high risk); 40% of Americans have a score under 600.

Credit Bureaus:

TransUnion, Equifax, Experian (each has its own credit score).

Types of Entries in a Credit Report:

• Identifying Info
• Public Records (bankruptcies, civil judgments, and tax liens)
• Inquiries
  • Soft Inquiries (i.e., a credit

Understanding the Marketing Environment

Actors and Forces Shaping Marketing Success

A company's marketing environment encompasses the actors and forces beyond marketing that influence marketing management's capacity to cultivate and sustain successful relationships with target consumers. Companies must vigilantly monitor and adapt to the ever-changing environment. The marketing environment comprises two key components:

• Microenvironment: This includes actors close to the company that impact its ability to engage and serve customers effectively.
• Macroenvironment: This consists of broader societal forces that shape the microenvironment, including demographic, economic, natural, technological, political, and cultural factors.

The marketing environment... Continue reading "Understanding Marketing Environment and Consumer Behavior" »

Chapter 7: Business Accounting

What are Accounts and Why are They Necessary?

Accounts are financial records of a firm's transactions that are kept up to date by accountants, who are qualified professionals responsible for keeping accurate accounts and producing the final accounts.

Every end of the year, final accounts must be produced, which give details of:

• Profits and losses made
• Current value of the business
• Other financial results

Limited companies are bound by law to publish these accounts, but not other businesses.

Financial Documents Involved in Buying and Selling

Accountants use various documents that are used for buying and selling over the year for their final accounts. They can help the accountant to:

• Keep records of what the firm bought and

Economic Boom and the Great Depression

A period of general prosperity in the 1920s ended with the collapse of the Great Depression in the 1930s.

Key Factors and Events

• Bull Market: A stock market in which stock prices were steadily increasing. In the bull market of the 1920s, stock prices became vastly inflated.
• Buying on Margin: Purchasers were able to buy stocks on margin, putting only 10% down and borrowing 90%.
• Speculation Boom: Refers to the practice of buying real estate, stocks, or anything else to sell later at a profit.
• Black Tuesday: The market crash on October 29th.
• Smoot-Hawley Tariff: Reduced international trade.

Key Figures and Groups

• Herbert Hoover: Republican who believed in Laissez-faire economics. He did not think the federal government