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

Consumer Society and Environmental Impact

It is often said that we live in a Consumer Society; we consider it important to buy products and services. Companies need to be aware of the impact of this on the Environment, the natural world around us.

Corporate Responsibility and Sustainability

Many companies use Packaging (boxes, bottles) which has been Recycled, that is, made using old materials. Pollution, such as smoke in the air, can be reduced if companies use trains instead of road transport.

Raising Capital: Stocks and Bonds

A company can raise money on the Stock Market or Stock Exchange (a marketplace for buying and selling shares) in two different ways:

1. Issuing Shares (US Stocks), or units of its capital, to Institutional Investors.
2. Issuing

N09/3/GEOGR/BP1/ENG/TZ0/XX

Global Population Dynamics and Health

1. Analyzing Population Trends and Health Impacts

(a) Describing Trends in Fertility and Literacy Rates

Referring to the graph, describe the trends in the two rates:

• Total female literacy rate increases over time.
• Global fertility rate decreases over time.

(Note: Responses should include specific quantification from the graph.)

(b) Reasons for Global Fertility Rate Trends

Suggest three reasons for the trend in global fertility. Reasons may include references to developed and/or developing regions, or a combination:

• Increasing emancipation of women, leading to choices for fewer children.
• Increasing educational opportunities providing career paths, thus delaying marriage or the first child.

Understanding Insurance Risk

Risk is involved in any situation in which some kind of loss or misfortune is possible. These can include:

• Financial: Loss of savings due to catastrophe.
• Physical: Health, welfare, or inability to secure income.
• Material: Home, vehicle, or property.

What is Insurance?

Insurance: Provides compensation for loss and spreads the cost of sharing risk.

When to Purchase Insurance

Purchase insurance when the probability of loss is small but the cost of loss is devastating. For example, restaurants typically don't insure plates because the loss is small, whereas Florida houses are often not insured due to the high probability of hurricanes.

Key Insurance Terminology

Premiums: Periodic payments for an insurance policy.

Insurance Policy:

Brand Awareness and Advertising Strategies

Brand Awareness: How present is your brand in the market? Is it recognized by the public?

Brand Image: What image do you project to your customers?

Brand Loyalty: Dedication to purchasing the same product or service repeatedly, now and in the future, from the same brand, regardless of a competitor's actions or changes in the environment.

Brand Stretching: When a company tries to launch products outside its core group. Example: Zara / Zara Home.

Announcement vs. Advertisement: An announcement is an act of announcing or giving notice, while an advertisement is a commercial solicitation designed to sell a commodity, service, or similar (marketing).

What Makes a Good Advertisement?

A good advertisement is:

• Clever
• Powerful
• Catchy
• Inspiring
• Uses

MANAGING INPUTS

Optimal production process: Right mix of input+Efficient procurement +Optimal usage = Firm operates on the cost function and not above it.

Transaction costs => Excess costs on the actual amount paid to the input supplier. Play a crucial role in determining optimal input procurement.

Include: Costs of searching for a supplier, Costs of negotiating, Other expenditures

Transaction costs à General in nature – Eg. Transportation costs

Specialized investment – an investment that cannot be recovered in another trading relationship.

Specialized investments increase transactions costs because they lead to: Costly bargaining, Underinvestment, Opportunism

Spending on machine to test some device.

Types of specialized investments: 1. Site... Continue reading "Optimal Input Procurement and Transaction Costs in Business" »

Understanding Bonds and Debt Instruments

Bonds are debt instruments where an investor loans a company money; the firm promises to repay the loan plus pay interest. Firms issue bonds to raise money for expansion.

• Bonds pay interest, while stocks typically pay dividends.
• Bonds often offer a guaranteed rate of return and are generally considered less risky than stocks.
• Bonds are typically sold in increments of $1,000.

Investment Companies and Market Trading

Investment companies facilitate the buying and selling of securities in open markets.

Mutual Funds: Pooled Investment Vehicles

A mutual fund is a type of investment that pools money from many investors and uses it to make investments based on a stated investment objective. Each shareholder participates... Continue reading "Understanding Bonds and Mutual Funds: Investment Strategies" »

Business Name - A name or title under which a person or entity conducts a business.

Business Domain - A business's website address or URL on the internet that gives you an online identity or brand. It's a valuable part of your business identity and is an important marketing tool that can help customers find and identify with your business.

Trade Practices Legislation - The business owner must comply with trade practices legislation when establishing his or her business. The Competition & Consumer Act 2010 (Cwlth) is a federal law that specifies what business behavior is acceptable in relation to a wide range of issues.

Business Tax Compliance - A means by which governments finance their expenditure by imposing charges on citizens and corporate... Continue reading "Essential Business Compliance: Key Aspects for Success" »

Economic Foundations: Factors of Production

Real economic problems often stem from a lack of essential factors for production:

• Capital: Financial resources, machinery, and infrastructure.
• Labor: Human effort, skills, and workforce.
• Land: Natural resources, including raw materials and physical space.
• Enterprise: The entrepreneurial spirit, ideas, and risk-taking ability to combine other factors.

Opportunity Cost Defined

Opportunity cost is the value of the next best alternative that was forgone when a particular choice was made.

Division of Labor

Division of labor involves splitting the entire production process into distinct, specialized parts or tasks.

Advantages of Division of Labor

• Faster production rates and increased efficiency.
• Higher overall production