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

The Law of Variable Proportions

The law of variable proportions states that as the quantity of one factor is increased, keeping the other factors fixed, the marginal product of that factor will eventually decline. This means that up to the use of a certain amount of variable factor, the marginal product of the factor may increase and after a certain stage, it starts diminishing. When the variable factor becomes relatively abundant, the marginal product may become negative.

Perfect Competition

Perfect competition is a market structure where a large number of buyers and sellers are present, and all are engaged in the buying and selling of homogeneous products at a single price prevailing in the market.

In other words, perfect competition, also referred... Continue reading "Economics Basics: Markets, Revenue, and Costs" »

Explain the differences and concerns with performance measures

Different types of Performance Measures. 2 types of measures:

• Objective Measures: quantitative and based on counts of behaviors or outcomes. Ex: number of students in a class, multiple choice exam.
• Subjective Measures: qualitative and based on judgments from raters.

Explain the value of using multiple sources for performance appraisal ratings

Common Problems with Performance Measures (1/2) Rater Errors. Rating errors occur when:

1. Raters provide assessments that follow an undesirable pattern.
2. The rater does not properly account for factors that might influence assessments.

A common error is central tendency error, which is the pattern of placing almost everyone in the middle of the scale.... Continue reading "Performance Measures, Appraisals, and Compensation Practices" »

CPK Financial Strategies

Shareholder Compensation Methods

CPK has several methods to compensate shareholders:

1. Dividend Payout: CPK must decide to pay a dividend as another method to compensate shareholders.
2. Share Repurchase: It could carry out a share repurchase, which is a transaction where a company buys back its own shares from the marketplace. A company might buy back its shares because management considers them undervalued. CPK’s share price has declined 10% in the recent period, so by repurchasing shares it would create a positive signal to the stock market, resulting in an increase of stock price, and it would generate incremental economic value.
3. Dividend Policy: It could also carry out a dividend policy, which is the policy a company uses

The initial talks on reconstructing a postwar international monetary system started between the United States and United Kingdom as early as 1941. The lead negotiators were Harry Dexter White for the USA and John Maynard Keynes for the British. Given the US economic and political dominance at the end of the war, it is not surprising that the eventual system reflected more the US proposals. The system that emerged was ratified at an international monetary conference held at Bretton Woods, New Hampshire, attended by some 44 countries although some commentators dubbed the conference as a meeting of 1.5 nations (the USA and the UK!).

The Bretton Woods Agreement created three institutions. The World Bank dealt with structural and long-term development

Chapter 8: Individual Taxation

The Marriage Penalty occurs when a couple's tax liability is greater when filing married jointly than if both had filed under single status.

The Kiddie Tax applies to a child if:

1. They are ≤18 years old at year-end,
2. They are 18 at year-end but earned income ≤ half of their support, or
3. They are 18 ≤ age ≤ 24, a full-time student, and earned income ≤ half of their support.

If the Kiddie Tax applies, net unearned income (NUI) can be taxed at their parent's marginal tax rate. NUI is income in excess of $2,100.

Alternative Minimum Tax (AMT) is often caused by high capital gains, multiple children, and high state taxes. After multiplying the AMT base by the AMT rate, subtract the regular tax liability from this amount.... Continue reading "Tax Rules for Individuals and Businesses: Key Concepts" »

Institutional frameworks play a crucial role in facilitating international trade and investment in emerging economies. These economies have been experiencing above-average economic growth.

Political Risk

Political risk refers to the potential impact of political changes or instability in a country on an investment's returns.

Legal

Legal factors such as private property rights, freedom of contract, and economic liability are important considerations in business.

Economical

A predictable economic policy is essential for businesses operating in any country.

Motivation MYA

Strategic realignment, synergy, diversification into new markets, financial considerations, know-how, and human resources are some of the motivations behind business decisions.

Intranational

Targeting... Continue reading "Emerging Economies: Facilitating International Trade and Investment" »

Outsourcing

Outsourcing is a business practice in which a company hires another company or an individual to perform tasks, handle operations, or provide services that were either usually executed or previously done by the company's own employees.

Marketing Mix (MX)

Essential to the set of actions, or tactics, that a company uses to promote its brand or product in the market. The 4 Ps make up a typical marketing mix: Price, Product, Promotion, and Place, including packaging, positioning, people, and even politics.

Raw Materials

Raw materials are materials or substances used in primary production or manufacturing.

Trade Union

A trade union is an organization whose membership consists of workers and union leaders, united to protect and promote their... Continue reading "Business Terminology Glossary" »

Good Supplier Selection

To value and compare:

• Qualities
• Prices
• Discounts
• Terms
• Cost of Transportation
• Packaging
• Payment
• Customer Service
• Long-term Relationship Potential

Supplier Comparison Table

Prepare a comparative table showing all offers:

• Prices
• Quality
• Payment Terms
• Delivery
• Discounts
• Etc.

Importance of Transportation

Transportation is important because it involves the transfer of goods. Consider freight costs (noli), freight services, and insurance, especially for expensive products, to ensure their safety and potentially save costs.

Managing Long Delivery Times

Regarding delivery: If payment is late, the seller typically has the right to charge interest. Payment is normally due fifteen days after delivery of the product, allowing the buyer time to verify... Continue reading "Supplier Selection and Evaluation" »

Political Landscape

The two political groups that dominated the assembly were:

• Girondins: Represented the interests of the bourgeoisie.
• Jacobins: Represented the laborer people and the sans-culottes.

The Roaring Twenties (1920-1929)

The year 1929 marked the end of an era of extraordinary economic prosperity in the United States known as the Roaring Twenties. This expansion resulted from increased demand during World War I and the post-war recovery.

Burgeoning Economic Growth

The expansion of the American economy was driven by a change in production dominated by technical innovation and changes in work organization, characteristic of the Second Industrial Revolution.

Consumer Revolution

A significant shift occurred in the systems of demand and supply.... Continue reading "The Roaring Twenties and the Great Depression: A Historical Analysis" »

Tax is to raise revenue (cover a range of government expenditure) (e.g. Build school, hospital, improve road)

To discourage certain activities that will cause damage to people’s health or pollution. (e.g. cigarette, cars, fuel)

To discourage the import of goods, import tax is referred to as tariff

To redistribute income from the rich to poor

Direct tax: paid directly to the government from your wages

Indirect tax: tax that is added on goods and services. Consumers pay tax by paying more for the goods or services.

Progressive tax: rich people pay more than poor people

Regressive tax: poor people pay more than rich people. This happens when the government imposes a tax at a set rate.

Proportional tax: Everyone has to pay the same percentage of income.... Continue reading "Understanding Taxation and Trade" »