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

It affects the behavior of consumers in a broad sense such as, for example, prompting them to make decisions that they would not have otherwise adopted.  

An Overview of Europe’s Film Industry

Ivana Katsarova

Despite pioneering both technological and content innovation in cinema, the EU film industry is currently characterized by the strong presence of Hollywood productions (70% market share in 2013). The major US companies benefit from vertical integration, encompassing both production and distribution, which allows them to spread risk and reinvest profits. To address the financing challenges faced by EU film companies, various film-support schemes have been established, totaling €2.1 billion in 2009.

Within the EU, the "big five" – France, Germany, the UK, Italy, and Spain – account for approximately 80% of releases, industry turnover, and employment.

Challenges Facing the European Film

Economics Study Guide

Fundamental Economic Concepts

Scarcity

Limited amount of resources to fulfill unlimited wants. Law of Diminishing Returns: As a company maximizes its factors of production, production becomes more difficult.

Opportunity Cost

The next best alternative sacrificed when making a choice.

Thinking at the Margin (T@M)

Making decisions based on the next unit or increment.

Production Possibilities Frontier (PPF)

A graph showing the possible combinations of two goods or services that can be produced with given resources and technology. Guns vs. Butter: A classic example of a simple PPF illustrating the trade-off between producing consumer goods and military goods.

Market Systems

Product Market

Where goods and services are bought and sold by... Continue reading "Economics Study Guide: Key Concepts and Definitions" »

International Trade: Barriers, Payments, and Protectionism

• Trade Barriers: Tariff or non-tariff measures.
• Balance of Payments: When trading, financial transactions occur among consumers worldwide, creating constant money flow. This is "the system of accounts that records a nation's international financial transactions, transactions between inhabitants and worldwide, using a double-entry bookkeeping system."
• Payments:
  • Goods imported
  • Spending by tourists
  • Outside investment
  • Foreign military spending
  Receipts:
  • Exports
  • Transportation payments
  • Payments from FDI abroad
• Accounts:
  • Current Account: Export and import of goods and services.
  • Capital Account: Record of investment (direct, portfolio, short-term).
  • Reserves: Export and import of gold, changes in foreign

DIVIDEND POLICY

Factors Influencing Dividend Decisions

Rate of Asset Expansion

Companies planning significant expansion may retain earnings to finance growth, avoiding the cost and time involved in raising new capital.

Profit Rate

A company's profitability directly impacts its ability to pay dividends. Higher profits lead to more available cash for distribution to shareholders.

Earnings Stability

Companies with stable earnings are more likely to consistently pay dividends compared to those with volatile earnings.

Access to Capital Markets

Easy access to capital markets allows companies to raise funds for expansion without retaining earnings, providing flexibility in dividend policy.

Control and Ownership

Management may retain earnings to maintain control... Continue reading "Understanding Dividend Policies: Factors, Models, and Strategies" »

Regressive Tax

A regressive tax is a tax that takes a larger percentage of income from low-income earners than from high-income earners. It is the opposite of a progressive tax, which takes a larger percentage from high-income earners. A regressive tax is applied uniformly to all situations, regardless of who is paying.

Regressive Tax vs. Progressive Tax

A progressive tax is a tax whose rate increases as the payer's income increases. The higher the income, the higher the proportion of their income is taxable. A regressive tax is the opposite. Its rate increases as the payer's income decreases. The progressive tax affects high-income earners, while the regressive tax affects the low-income class.

Zero-Based Budget

A zero-based budget is a method... Continue reading "A Guide to Basic Financial Concepts" »

Oligopoly

Oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. The concentration ratio measures the market share of the largest firms. A monopoly is one firm, duopoly is two firms and oligopoly is two or more firms. There is no precise upper limit to the number of firms in an oligopoly, but the number must be low enough that the actions of one firm significantly influence the others.

Perfect Competition

• All firms sell an identical product (the product is a 'commodity' or 'homogeneous').
• All firms are price takers (they cannot influence the market price of their product).
• Market share has no influence on prices.
• Buyers have complete or 'perfect' information—in the past,

4.3. Driving Forces and Game Changers

• Employment is a major political concern, but labour productivity is also important.

Labour productivity can be improved by the capital ratio (K/L, machinery to labour ratio), or by rises in total factor productivity (TFP).

Work total factor productivity (TFP) is the product of improvements in technology innovation, human capital, and management competences.

Golden days: 1944-1970. Many technological advances: electricity, internal combustion engine, running water, communications, chemicals, petroleum, etc. This led to the development of knowledge-intensive branches like ICT (Information and Communication Technologies).

Productivity is increasing more slowly since the 1970s than during the Golden Age, in part... Continue reading "Driving Forces and Game Changers: The Transition from Industry to Services" »

Chapter 1: Introduction to Finance

Finance is the study of how and under what terms savings (money) are allocated between lenders and borrowers. Here are some key concepts:

• Real assets: Tangible assets.
• Financial assets: Claims on real assets.
• Flow of savings: Savings flow from households to governments and businesses.
• Financial intermediaries (indirect claims): Invest on behalf of investors (e.g., chartered banks, pension funds, mutual funds).
• Market intermediaries (direct claims): Brokers (e.g., insurance).
• Credit crunch: Financial intermediaries raise loan costs due to an inability to secure financing on reasonable terms.

Crown corporations, like Hydro Quebec, are also major borrowers.

Types of Financial Assets

• Non-marketable financial assets: Invested

Topic 5: Aggregate Planning

Objective

The objective is to meet the forecast demand while minimizing the total cost over the planning period. The planning process determines the quantity and timing of production for the intermediate future.

Requirements for Aggregate Planning

• Measure sales and output
• Forecast demand
• Determine costs
• Schedule decisions for the planning period

Chase Strategy

Match output rates to the demand forecast for each period. Vary workforce levels or vary production rates.

Level Strategy

Daily production is uniform. Use inventory or idle time. Stable production leads to better quality and productivity.

Topic 7: Inventory Management

ABC Analysis

Divides inventory into three classes based on annual dollar volume:

• Class A: High annual dollar