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

We assume that cotton yarn is a normal good, and that the population is growing while income per capita is increasing. This graph shows how demand shifts to the left, resulting in an increase in both price (P) and quantity demanded (Q) if ceteris paribus (CP) holds.

However, there have been some changes that have made cotton yarn cheaper. Firstly, there have been significant technological advancements such as the water frame or the mule jenny. These innovations were not cheap, but they led to the emergence of the factory system, which benefited from economies of scale and reduced the average cost per unit.

Moreover, technology has also had an impact on labor, as it enabled the utilization of cheap labor sources such as women and children. These... Continue reading "The Impact of Technological Innovations on the Cotton Yarn Market" »

Chapter 3

1- Define The marketing environment? Includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers.

2- Define Micro environment?

A microenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

1. The Company: In designing marketing plans, marketing management takes other company groups into account. These interrelated groups form the internal environment.
2. Suppliers: Are those firms and individuals that provide resources needed by the company and its competitors to produce goods and services. Suppliers provide

Improvement methods:

1. Lean manufacturing is a system for maximizing product value. Six Sigma is a problem-solving methodology that uses its collection of tools to fix a specific project over a specific time period. All Six Sigma’s resources are targeted on this one project until the problem is fixed. While Lean Manufacturing encourages daily, general improvements, Six Sigma demands data-based, specific improvements for specific projects.

Six sigma:

Set of techniques and tools for process improvement. Their strategies seek to improve the quality of the output of a process by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes.

The 6 Sigma method thus poses as a fundamental principle:... Continue reading "Lean Manufacturing and Six Sigma: Methods for Quality Improvement" »

SMALL BUSINESS:Any independently owned and operated business that is not dominant in its competitive área.

SHARING ECONOMY

• An economic model involving the sharing of underutilized resources 

•  Entrepreneurs earn income by renting out an underutilized resource such as lodging or vehicles 

•  Uber is an example 

•  Referred to as the “gig economy” 

• Are workers independent contractors or employees? 

EQUITY FINANCING:Referred to as equity financing because the owner uses real personal assets rather than borrowing funds from outside sources to get started in a new business.

Can also obtain equity financing by finding investors for their operations and selling stock in the business to family members, friends, employees or other investors.

VENTURE

Arable farming

Concept of the economic activity: Jobs done by people to satisfy society's needs and for wealth.

• Production
  • Types of goods depending on production
  • Intermediate goods
  • Provision of services
• Delivery and state of goods and services

Distribution

• Two steps in sale:
• Wholesale
• Retail

Consume

Concept: Use of a good or service to satisfy your own needs.

• Two types of goods depending on consumption:
• Durable
• Non-durable

Factors Affecting Production

• Human capital: Employees and business men
• Capital
  • Physical capital: Machinery, furniture, and raw materials
  • Financial capital: Money necessary to begin production
• Resources used to produce goods and services

The Market Economy

Number of products available depends on:

• Inflation
  • What causes it?
  • General rise of prices in

Consumer Optimization

The budget constraint (BC) is defined as: P₁X₁ + P₂X₂ = M, where the slope is -P₁/P₂ = dX₂/dX₁. The consumer optimizes consumption decisions by reaching the highest satisfaction level given their resources. Any point on the BC other than the equilibrium is non-optimal, as it won't be on the highest indifference curve.

The Marginal Rate of Substitution (MRS) is -MU₁/MU₂, representing the slope of the indifference curve.

Firm Optimization

Profit Maximization

Profit = Py - w

Profit maximization occurs when marginal revenue (MR) equals marginal cost (MC).

• When MC = MR, the firm achieves maximum efficiency.
• When MC < MR, the firm is inefficient and should increase production.
• When MC > MR, the firm is inefficient and should reduce

The 2008 Economic Crisis and Unemployment

In 2008, a significant economic crisis began, impacting the entire world, especially Europe. The most noticeable consequence has been high unemployment.

Understanding the Unemployment Rate

The unemployment rate is the percentage of the total labor force that is unemployed but actively seeking employment and willing to work.

Unemployment Trends in the European Union (2008-2014)

In the European Union, between the start of the crisis in 2008 and 2013, the unemployment level rose to a rate of 10.9%. However, since 2013, it has begun to decrease, reaching 9.9% by the end of 2014, largely due to the slow recovery of the economy.

European Countries with Varying Unemployment Rates

Currently, countries with lower unemployment... Continue reading "Unemployment in Europe: Crisis, Youth, Long-Term, and Brain Drain" »

·MONOPOLISTIC ADVANTAGE:

Suggests that FDI is preferred by MNEs because it provides the firm with control over resources and Capabilities in the foreign market, and a degree of monopoly.

Economic and Monetary Union

The Economic and Monetary Union (EMU) is an instrument to further the objectives of the European Union and improve the lives of citizens in the Member States. The operations and management of the EMU are designed to support sustainable economic growth and high employment through appropriate economic and monetary policy-making. It involves four main economic activities:

• Implementing an effective monetary policy for the euro area
• Coordinating economic and fiscal policies
• Ensuring the smooth operation of the single market
• Supervising and monitoring financial institutions

Monetary Policy

Monetary policy involves influencing interest rates and exchange rates to benefit a country's economy. It is managed through the European... Continue reading "Economic and Monetary Union: Understanding EU Financial Stability" »