Notes, abstracts, papers, exams and problems of Economy

question 7

state & explain the 3 reasons 4 the downward slopping nature of ad curve

ad slopes downward people will buy more goods & services @ lower price levels,& vice versa.

real balances effect: the cash U hold is worth more when the price level falls,so U can buy more.

foreign trade effect: lower price levels in the united states convince customers 2 buy more american goods & fewer foreign goods.

interest rate effect: lower interest rates promote more borrowing & more spending.

question 8

state & explain the 2 reasons 4 the upward sloppng nature of as curve

as slopes upward;suppliers will bring more goods & services 2 market @ higher price levels,& vice versa.

profit effect: if there is no change in the cost of operating... Continue reading "Indifference curve, graph, income effect and substitution effect, a level economics" »

Service Pricing: Strategies and Value

Pricing Strategies: How Service Pricing Differs from Product Pricing

Service pricing presents unique challenges due to the variability of prices, the intangibility of services, and the difficulty in recognizing backstage costs. Unlike products, services often have a wide range of prices and quality within the same class. Service organizations use different terms to describe prices (e.g., offers, charges), which can confuse customers. Price can also be an indicator of quality, with higher prices sometimes evoking a perception of higher quality. However, pricing too low may raise questions about quality. Many services, such as restaurants, have higher total costs, including costs beyond paying suppliers.

Related

Understanding Companies

What is a Company?

A company is a legal entity made up of an association of persons, be they natural, legal, or a mixture of both, for carrying on a commercial or industrial enterprise.

Types of Companies by Economic Sector

• Commercial Companies: Dedicated to buying and selling goods.
• Industrial Companies: Dedicated to producing goods.
• Agricultural Companies: Dedicated to cultivating and raising livestock.
• Extracting Companies: Dedicated to the extraction of riches from the earth.
• Service Companies: Dedicated to offering services.

Types of Companies by Size

• Small Companies: Companies with no more than 20 workers. Examples include grocery stores, restaurants, and bakeries.
• Medium Companies: Companies with less than 100 workers. These

The Stock Exchange Market

A bond is a document issued by a government or a company borrowing money from the public, stating the existence of a debt and the amount owing to the holder who must show this document in order to obtain repayment of the loan.

Difference between bonds and stocks is that stockholders are owners of the company they’ve invested in whereas bondholders are only lenders.

Issuer is the identity who borrows an amount of money and pays the interest.

-The principal of a bond is the amount that the issuer borrows which must be repaid to the lender.

The coupon is the interest that the issuer must pay.

Maturity is the date that the issuer must pay.

Indenture is the contract that states all the terms of the bond.

A stock is a piece of... Continue reading "Understanding the Stock Exchange Market: Bonds, Stocks, and Trading" »

1.1-Defining quality: Quality=Performance(how it works)/Expectations. If Q is bigger than 1=good feeling.  The customer determines his expectations. Quality df: Group of properties and characteristics of a service or a product that has the ability to satisfy different necessities. Some dimensions of quality are reliability, durability, service, reputation... These dimensions are independent.

10: Why were demand deposits considered as money?

Answer: Since demand deposits are accepted widely as a means of payment along with currency, they are also considered as money in the modern economy.

11: What would happen if all the depositors went to ask for their money at the same time?

Bank would not be able to give money to the depositors if they all went to ask for their money all at the same time. This is because, banks keep only about 15% and would have already used the balance portion of their deposits to extend loans.

12: What were the reasons that make Swapna’s situations so risky? Discuss factors: pesticides, role of money lenders, climate.

Pest attack, exploitation by money lenders, and lack of monsoon are the reasons that make Swapna’s... Continue reading "Understanding Money, Risk, and Collateral in the Economy" »

2(a) (i) Combined market share of the four largest Grocery firms is 76%

2(a) (ii) Oligopoly is where a few large firms dominate The market

2(a) (iii) Price competition is when a firm might reduce price to gain customers from rival firms, or, to make the groceries more Affordable (e.G. BOGOF offers etc)

Non-price Competition: Firm might advertise, use loyalty cards, offer online shopping, or Offer free delivery. They would do this because for example a loyalty card will Encourage people to shop with the same company and so get points or coupons Quality, product differentiation.

2(a) (v) Bulk buying due to this they are able to Negotiate lower prices for goods

2(a) (VI) Diseconomies of scale lead to higher unit Production costs so firms may pass

Dumping And Anti-Dumping Duties

The Period Leading Up to the 2008 North Atlantic Crisis

The 2008 crisis started in the US and then spread to the rest of the world. This was because there was an intense relationship between the US’s shadow banking and the European banks – European banks were financing the American private sector.

The European Union

A crucial factor was the massive expansion of the European banking system (1985-2002).

Megabanks contributed significantly to housing price bubbles and financial bubbles.

The Maastricht Treaty decided to keep responsibility for supervising and rescuing banks at the level of individual member countries rather than centralizing it at the union level.

The United States of America

The Vietnam War and the oil price shocks led to rising... Continue reading "Understanding the 2008 Financial Crisis: Causes and Restructuring" »