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

The Market

Producer and Consumer Markets

The market is the space where sellers and buyers meet to achieve their objectives. In consumer markets, the consumer buys the product for consumption. However, when products are sold for use in the production process, this is known as a producer market.

Market Segmentation, Targeting, and Positioning

Definition of Segmentation

Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively.

Segmentation Methods

A market segment is a group with similar needs and wants. There are various ways in which a market may be segmented, including:

• Geographic Segmentation: This focuses on the impact of factors such as the location of customers

Chapter 1 & Chapter 2

◦The production possibilities curve shows the maximum quantity of goods and services that can be produced when the existing resources are used fully and efficiently.

Chapter 3

Demand Curve/ Supply Curve

1. Movement along the curve (Change of Quantity Demanded/ Quantity Supplied): Price of this product (Demand Law / Supply Law)

• Demand is the amount of a product that people are willing and able to purchase at each possible price during a given period of time.
• The quantity demanded is the amount of a product that people are willing and able to purchase at one, specific price.

Law of Demand

As price of a good rises, consumers buy less. As price of a good falls, consumers buy more. Depicts the inverse quantity-price relationship... Continue reading "Understanding Demand and Supply in Economics" »

Question 2 Analysis

(a)(i) Calculating Average Cost

Total costs = €1300

No. of kilos = 130

Average cost per kilo = €1300/130 = €10

(a)(ii) Calculating Profit

Total Revenue (TR)= 130 x €30 = €3900

Total Cost (TC) = €1300

Profit (TP or P)= €3900 -€1300 = €2600

(a)(iii) Identifying Variable Costs

B Variable costs

(a)(iv) Explaining Variable Costs

Variable costs change as production changes. For example, more sugar is needed as more sweets are produced.

(a)(v) Calculating Fixed Costs

Fixed costs = rent + insurance = €500 + €50 = €550

(a)(vi) Explaining Fixed Costs

Variable costs vary with output, so when output is zero, no variable costs are incurred.

(a)(vii) Limitations to Firm Growth

Lack of finance is the most important limitation to... Continue reading "Cost Analysis, Market Structures, and Business Growth in the Confectionery Industry" »

Quiz 8: Product Development & Distribution

1. The ______ step is the process of conducting market research on a potential product when engaging in the Product Development/Design process. EVALUATE

2. The CYL Yoga Studio is opening soon and needs to set up their product categories. All of the following will be labeled in the goods category EXCEPT: YOGA RETREATS

3. The Distribution Model represents all of the following EXCEPT: the flow of internationalization

4. ______ Model considers the logistics of having the right product in terms of the flow of information, innovation, compensation, and transaction costs. Miyazaki’s Distribution Approach

5. The ______ step is the process of determining the feasibility for a potential product when engaging in the Product

Market Research: Primary and Secondary

What is market research?

Market research is the process of gathering, analyzing, and producing data relevant to the marketing process, such as the size of the market, key market trends, or characteristics of customers. Market research can identify the reasons for buying a product and customers’ wants. It provides a manager with information for effective decision-making. The objective of market research is to meet consumers’ needs more effectively.

Primary and Secondary Market Research

Primary market research gathers data for the first time for a specific purpose and is conducted face to face with customers. It can be tailored precisely to your own needs but can be expensive and time-consuming. Mistakes... Continue reading "Market Research: Primary, Secondary & Product Life Cycle" »

Price Ceilings: Market Intervention

A price ceiling is a legal maximum on the price at which a good or service can be sold. It is imposed by the government to prevent prices from rising above a certain level.

Not Binding Price Ceiling

When the government imposes a price ceiling of 4€ per cornet, but the market equilibrium price is 3€, the ceiling has no effect on the market price or the quantity sold. The market naturally operates below the imposed maximum.

Binding Price Ceiling

When the government imposes a price ceiling of 2€ per cornet, and the equilibrium price is 3€, the price ceiling becomes a binding constraint on the market. Supply and demand naturally push the market price towards the equilibrium, but when the price hits the ceiling,... Continue reading "Government Intervention: Price Controls & Externalities" »

US Sugar Quotas: Impact on World Prices?

The United States uses quotas to limit sugar imports and protect its domestic producers. Since the US is a large consumer, reducing its imports decreases demand on the world market. This likely leads to a lower world price for sugar compared to a free trade scenario. Conversely, the domestic price within the US increases due to the restricted supply.

The 1933 US "Buy American" Act: Purpose and Impact?

The federal "Buy American" Act was passed in the United States in 1933, primarily during the Great Depression.

• Purpose: To stimulate the US economy by requiring government agencies to prioritize purchasing domestically produced goods.
• Impact:
  • Potential Benefits: Increased demand for American products, potentially

Types of Banks

Executive Summary

When you think of a bank, the first thing that comes to mind might be the place that holds your checking or savings account. But there are several different types of banks, all serving different types of needs. It is possible that many of the banks are not known, but each bank plays a very important role in the day to day. For example, Banking system is a group or network institutions that are responsible for operating a payment system, loans, deposits and helping with investments.

Introduction:

This report will look at:

• Commercial Banks
• Credit Unions
• Investment Banks
• Online Banks
• Offshore Banks

Findings:

1. At a Commercial Bank you can open a chequing or saving account apply for a car or home loan, transfer money or pay... Continue reading "Understanding the Different Types of Banks and Their Roles" »

Fiscal Policy

Stimulus

• Purchasing more goods and services (G + N + S)
• Lowering taxes (individual income tax cut, corporate tax cut)
• Increasing income transfers

Restraint

• Decreased government spending (AD = FR = induced decrease)
• Increased taxes
• Reduced income transfers

Classical Economics

1. Supply creates its own demand
2. Excess income should be matched by an equal amount of investment by businesses
3. Interest rates, wages, and prices should be flexible
4. The market is always clear because prices would adjust through the interactions of supply and demand

Keynesian Economics

1. At macroeconomic equilibrium, the economy would experience neither full employment nor price stability
2. Even if the market's macroeconomic equilibrium were perfectly positioned, it would not last
3. Macroeconomic

Accounting Practice Problems: Solutions & Explanations

Depreciation Calculation: Custom Closets Fixtures

Custom Closets purchased office fixtures on January 1. The initial cost was $20,000, and the fixtures had a residual value of $4,000. The fixtures were initially assigned a useful life of 8 years.

After the end of three years, it was determined that the fixtures would be obsolete in 2 more years, and their residual value would still be $4,000.

Depreciation for Fourth Year (Straight-Line Method)

Answer: $5,000

Marketable Securities: Income Statement Reporting

Unrealized Gains/Losses on Income Statement?

Answer: Trading securities

Available-for-Sale Securities: Fair Value Adjustment

On January 1, 2016, Becky Corporation purchased 200 shares of Emily... Continue reading "Accounting Practice: Depreciation, Securities, and Bonds" »