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

1.5 Protection vs. Integration

Protectionism: The protection objective is to keep alive domestic production and to increase import prices. For this purpose, it uses different instruments:

• Tariffs: taxes on imported goods to protect the domestic industry. An external tariff is a 'tax' on foreign products introduced in the domestic market. The effect is that its price is higher and it is more difficult to compete with domestic products.
• Quotas on imports: is a limitation of the quantity of foreign products to be imported, regardless of the price. Quotas limit imports and increase domestic prices. The limited quantity is an obstacle for foreign products when international prices have decreased.
• Non-tariff barriers: are administrative regulations for

The US: Prosperity, Crisis, and the New Deal

The Roaring Twenties: An Era of Economic Growth

The decade from 1918 to 1929, following World War I, was a period of significant economic growth in the United States. The American Way of Life, with its core values of individual initiative and the pursuit of success, became an influential model for much of the world.

Key Drivers of 1920s Economic Growth

• Significant technical innovations.
• The implementation of Fordism (mass production techniques), leading to mass consumption and a booming stock market.
• A notable rise in workers' wages.
• Extensive and persuasive advertising campaigns.
• The widespread availability of hire-purchase (installment buying) options.
• Increased accessibility to bank loans for businesses

1.Which Of the following is not a criterionfor Judging the result of an economic policy

b.Employment

2.Economicsis the study ofhow

a.Scarce Resources are used to satisfy unlimited wants

3.The Opportunity cost of choice X can be defined as

b.The Most highly valued alternative to choice X

4.Carlo Discovers when he studies for his macroeconomics tests at the bar, he earns Better grades. He advises all students to study at the bar for similar results. Carlo his guilty of committing

a.The Fallacy of composition

5.Households Are

a.Suppliers In the input market

6.The price of Good C increases and as a result, The demand for good D increases. The two goods are

b.Substitutes

7.Because The nation N is operatingat a point Inside its PPF, it

b.Has Unemployed or inefficiently

Comparative and Absolute Advantage in Trade

1. According to Adam Smith, there would not be trade because Kazakhstan has an absolute advantage in both products. However, taking into account David Ricardo's comparative advantage:

Summarizing: ... will specialize in... and sell it to... and...

Impact of Trade Restrictions on Stakeholders

2.

• Domestic Producers: They will be better off; the quantity produced increases, as does the price.
• Domestic Consumers: They will be worse off; they will consume smaller quantities bought at higher prices.
• State (Government): They will be better off or not, depending on how licenses are sold.
• Overall Country: The country will experience a deadweight loss.

Most Favored Nation Clause and GATT Article XXIV

3. Indeed, it does... Continue reading "International Trade Principles and Economic Dynamics" »

International Trade Policy Analysis

Impact of a 20% Tariff on Personal Computers

Given the following information, we will calculate the cost to consumers, the benefit to producers, the change in government revenue, and the deadweight costs of a proposed 20 percent tariff on personal computers.

Calculations for the 20% PC Tariff

With a 20% tariff, the price of personal computers increases from $2,000 to $2,400 (a $400 increase).

• Cost to Consumers (Loss in Consumer Surplus):
  The total loss in consumer surplus is the area of the trapezoid

Mercantilism (Dominant from The 16th to the 18th Century) - It's not efficient…Made a small group of people wealthy Emphasis on developing national power, building exports, getting bullion. Favored A large trade surplus, subsidizing big business, low wages.

Adam Smith - Is the "Father of Economics". Was a professor of Moral Philosophy in the Department of Logic. Made The Wealth of Nations in 1776. Describes the Building blocks of national economic wealth. Divisions of labor allows people To specialize Productivity rises up due to improvements in dexterity, ↓ use of Time, and lead to Interconnect Economy. Trade = another building block; leads People to act in their own self-interest. Argued FREE trade benefits all parties. NOT zero-sum "I... Continue reading "Economic Theories and Concepts: Mercantilism, Adam Smith, and More" »

Core Terminology for Merchandising Operations

Parties and Inventory Management

Retailer

A business that sells goods directly to the final user, the customer.

Wholesaler

A business that sells goods to retailers.

Merchandise

Goods purchased specifically to be resold to customers.

Inventory

The items of merchandise a business currently has in stock.

Sales Transactions and Revenue Recognition

Sales

A revenue account used to record the amount of merchandise sold.

Sales on Account

The sale of merchandise where payment will be received at a later date (a credit sale).

Charge Customer

A customer to whom a sale on account is made.

Credit Cards

A card issued by a business containing a customer’s name and account number that facilitates the sale on account.

Sales Slip

A

Government Economic Policies

1) Economic growth: the government will always want the economy to grow. They can encourage growth through helping private business to grow, through low business taxes or through government involvement in growth sectors such as new high tech industries.

2) Prices: the government will want to make sure that the general level of prices in the economy is effectively managed. Prices need to rise in a relatively slow and predictable way so that future contracts can be made where both sides know the value of what they pay or receive. Government policies to control inflation might include reducing spending or raising taxes when prices start to rise.

3) Income distribution: all economies are characterized by inequalities in... Continue reading "Government Economic Policies and Financial Instruments" »

Understanding Business Risk

The term business risk refers to the possibility of inadequate profits or even losses due to uncertainties, such as changes in tastes and preferences of consumers, strikes, increased competition, and changes in government policy. These risks are generally categorized into two types: speculative and pure.

Nature of Business Risks

• Business risks arise due to uncertainties: Natural calamities, changes in demand and prices, and shifts in technology are examples of uncertainties that create risks.
• Risk is an essential part of every business: No business can avoid risk. While it can be minimized, it cannot be entirely eliminated.
• Degree of risk depends on nature and size: For small-scale businesses, the risk is typically less,