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

Value Chain

Primary Activities

These activities relate directly to the physical creation, sale, maintenance, and support of a product or service.

• Inbound Logistics: All processes related to receiving, storing, and distributing inputs internally.
• Operations: Transformation activities that change inputs into outputs sold to customers. This is where operational systems create value.
• Outbound Logistics: Activities that deliver your product or service to your customer, including collection, storage, and distribution systems. These can be internal or external to your organization.
• Marketing and Sales: Processes used to persuade clients to purchase from you instead of competitors. The benefits you offer and how well you communicate them are sources of value.

Key Business and Marketing Terms

Marketing Mix

The four key decisions that must be taken in the effective marketing of a product.

Random Sampling

Every member of the target population has an equal chance of being selected.

Stratified Sampling

This draws a sample from a specified sub-group or segment of the population and uses random sampling to select an appropriate number from each stratum.

Quota Sampling

When the population has been stratified and the interviewer selects an appropriate number of respondents from each stratum.

Cluster Sampling

Using one or a number of specific groups to draw samples from and not selecting from the whole population.

Stakeholders

People or groups who can be affected by and therefore have an interest in any action by an... Continue reading "Key Business & Marketing Terms: Definitions & Concepts" »

Understanding Tourism Systems

Elements of Leiper's Tourism System

Tourist: The human element, individuals on tourist trips.

Traveler Generating Region (TGR): The origin of tourist trips, where they begin and typically end.

Tourism Destination Region (TDR): The location where tourists engage in their main visiting activities.

Transit Routes: The paths tourists take between TGR and TDR, where their main traveling activity occurs.

Tourism Industry: A collection of organizations providing tourism-related services.

Tourism Demand

Three Major Concepts:

1. Effective Demand: The actual number of people participating in tourism.
2. Suppressed Demand: Individuals who desire to travel but are unable to due to various constraints.
3. No Demand: Those with no interest in traveling.

Growth and Productivity Formulas

• AGR: [(X_t/X_t-1) - 1] x 100
• PGR: [(X_t/X_o) - 1] x 100
• AACGR: [(X_t/X_o)^1/n - 1] x 100
• Growth Relationship: [1+(GR_a/100)] = [1+(GR_b/100)] / [1+(GR_c/100)]

Labor and GDP Metrics

• GDP per capita: GDP / People Employed x (People Employed / Population) = Labor Productivity x Employment Rate
• GDP per capita growth: [1+GR(GDP_pc)/100] = [1+GR(LabProduc)/100] x [1+GR(PEP)/100]
• GDP per capita (PPP$): GDP_pc($) / RPI x 100
• Compensation of Employees / GDP: Unit Labor Costs x Wage Earners Rate
• Unit Labor Costs: (Average Wage / Labor Productivity) x 100
• Wage Earners Rate: (Wage Earners / Total Employment) x 100

National Income and Savings

• Gross National Product (GNP): GDP + Net Income from Abroad = Consumption + GCF (I) + Net Exports + Net Income

The Role of Institutions in Economic Growth

Conditions for Beneficial Institutions

Several conditions contribute to the emergence of institutions that foster economic growth:

• Political Checks and Balances: Institutions that limit the power of political actors, such as through a balance of power, encourage the development of sound economic institutions.
• Broad Distribution of Power: When political power is dispersed among a wider group with substantial investment opportunities, the likelihood of favorable economic institutions increases.
• Limited Rent Extraction: Restricting the ability of those in power to extract excessive rents from society discourages the establishment of institutions that facilitate exploitation.

North and Thomas's Perspective

According... Continue reading "Economic Growth and Institutions: A Comprehensive Analysis" »

Global Entry Strategies

1. Exporting

Low risk, low control

Producing goods in one country and selling them in another.

2. Franchising

Low-moderate risk, low-moderate control

A contractual agreement between the firm (the franchisor) and another firm or individual (the franchisee). Allows the franchisee to operate a business using the name and business format of the franchisor.

3. Strategic Alliance

Moderate risk, moderate control

Collaborative relationships between independent firms - they do not invest in one another.

4. Joint Venture

Moderate-high risk, moderate-high control

When a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared.

5. Direct Investment

High

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

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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.