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

What are the objectives of auditing

AAS-1 describes the basic principles, which govern the auditor's professional responsibilities and which should be complied with whenever an audit is carried out. These are:-

1. Integrity, objectivity and independence:

The auditor should be straightforward, honest and sincere in his approach to his professional work. He must be fair and must not allow prejudice or bias to override his objectivity.

Confidentiality:

The auditor should respect the confidentiality of information acquired in the course of his work and should not disclose any such information to a third party without specific authority or unless there is a legal or professional duty to disclose.

Skill and competence:

The audit should be performed and... Continue reading "Auditing Objectives and Errors" »

Impact of Entrepreneurial Firms in Today's Economy

4.1 Global Entrepreneurship Monitor (GEM) by Babson College

Provides an annual assessment of the entrepreneurial environment of 42 countries.

Entrepreneurs lead to growth by:

• Entering and expanding existing markets
• Creating entirely new markets by offering innovative products
• Increasing diversity and fostering minority participation in the economy

4.2 The Most Impacting: The Gazelles (High Tech Growth Firm)

A “Gazelle” (high growth companies) is a business establishment with at least 20% sales growth in each year for five years, starting with a base of at least $100,000 in annual sales.

• Gazelles as leaders in innovation
• Produce twice as many product innovations per employee as do larger firms
• Have

If any triple of integers (x, y, z) satisfy (3.2), then so do any of (+x, ±y, +z); thus, to show the theorem, it suffices to show that there are 110 positive integer solutions to (3.2). The proof is accomplished by showing that if some solution (r, y, z) to (3.2) exists, then from that solution one can create another "smaller" solution (a', y', 2), where "smaller" means that z' < z. Since the positive integers are well-ordered, this process cannot continue forever, and so one must abandon the original assumption that some solution exists.

Modulo 4, x and y cannot both be odd.

Let x and y be even, say x = 2k, y = 2E; then 16 divides z², and so 4 divides z, say z = 4m.

Then (2k)4 + (tn)2, and division by 16 yields k4 + = in2, a smaller solution.... Continue reading "Proof of Theorem and Solutions to Equation (3.2)" »

Causes and Effects of Monopoly Power

Introduction

The goal of the present study is to analyze the causes and effects of the monopoly power of companies.

Causes of Monopoly Power

• Incentives for companies to have monopoly power:
• High levels of benefit leading to investment in Research and Development
• Economies of Scale
• Efficient production and success

Effects of Monopoly Power

• Less competition and higher prices
• Allocative inefficiency and diseconomies of scale
• Lower prices to suppliers

Conclusion

Monopolies generally lead to higher prices and are more inefficient. However, may be the best outcome for some industries with substantial economies of scale. This investigation has a number of limitations to be considered in evaluating its findings.

Problems and

Entrepreneurial Personal Traits

Strong Need for Achievement (McClelland, 1965)

• Need for accomplishing something important to them.
• Actively seeking out opportunities and taking responsibilities.

Risk-Taking Propensity (Begley and Boyd, 1987)

• Medium, calculated risk-takers.
• Avoid high and low risk situations.
• Ability to evaluate risk on a defined prospect.

Locus of Control (Rotter, 1966)

• Desire to be in control of their own fate.
• High internal LOC.
• The achievement of a goal is dependent on their own behavior.

Tolerance of Ambiguity (Schere, 1982)

• To have an open mind.
• Being responsive to changes.
• No need to know all superficial details.
• To have a flexible attitude.

Desire for Autonomy (Birley and Westhead, 1993)

• High need for independence.
• Smith (1967) noted a

INCOTERMS

Series of predefined commercial terms published by the International Chamber of Commerce intended to communicate the tasks, costs, and risks associated with the transportation and delivery of goods.

EXW:

Places minimum responsibility on the seller, who merely has to make the goods available suitably packaged. The buyer is responsible for loading the goods into a vehicle and all export procedures.

FCA:

Very flexible rule that is suitable for all situations where the buyer arranges the main carriage. The seller is responsible for export clearance. The buyer assumes all risks and costs after the goods have been delivered at the named place.

FAS:

Seller delivers goods, cleared for export, alongside the vessel at a named port. Risk transfers... Continue reading "Understanding INCOTERMS: A Guide to International Trade" »

Marketing: The Activity, Set of Institutions, and Processes for Creating, Communicating, Delivering, and Exchanging Offerings That Have Value for Customers

Marketing is the process of creating, communicating, delivering, and exchanging offerings that have value for customers and clients. In order for marketing to occur, there are several key factors:

• Two or more parties with unsatisfied needs
• Desire and ability to satisfy these needs
• A way for the parties to communicate
• Something to exchange

Environmental Factors

• Social (cultural changes)
• Economic (Macroeconomics)
• Technological (changing technology)
• Competitive (Alternative forms)
• Regulatory (laws regulate competition)

4Ps: Product, Price, Promotion, and Place

The 4Ps are essential elements of the marketing... Continue reading "Understanding Marketing: Key Concepts and Strategies" »

The Basic Economic Problem

The basic economic problem concerns allocating scarce resources to satisfy unlimited needs and wants.

Economic Agents

Economic agents include individuals or households, firms (private businesses), and the government (public sector). Private firms aim for profit, while the public sector provides services like education and healthcare.

Goods and Services

Goods are physical items produced, bought, and sold. Services are non-physical provisions paid for by customers.

Needs vs. Wants

Needs are essential goods and services for survival. Wants are non-essential goods and services desired by economic agents.

Factors of Production

Factors of production are resources needed to produce goods or services:

• Land: Natural resources.
• Labor:

Assessing Readiness to Internationalize

To assess readiness to internationalize, consider the following:

1. Analyze Organizational Readiness

   Examine business strengths and weaknesses relative to international business by evaluating key factors such as appropriate financial and tangible resources, relevant skills and competencies, and commitment by senior management to international expansion.

2. Assess Product/Service Suitability

   Systematically assess the suitability of the firm's products and services for foreign markets. Evaluate the degree of fit between the product or service and foreign customer needs.

Bargaining Power & Entry Mode Selection

A high-control entry mode is likely to be selected when:

• The host government strongly desires to attract

Canvas Model

Customer Segments

A company supplies products and services to one or several customer segments. Who are the customers? (Proveedores)

Value Propositions

Why should our customers buy our products (or services)? Which outstanding benefits do customers get? Do we fulfill their real needs?

Channels

Value propositions (not just products) are delivered to customers through several channels: communication, distribution, sales, etc.

Customer Relationships

What kind of long-term relationships does the company establish with the customer segment? How?

Revenue Streams (Income)

Revenue flows (i.e., money) represent the money customers would pay for the business's products or services.

Key Resources

Key resources encompass everything the company needs to... Continue reading "Understanding the Canvas Model and Marketing Plan" »