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

Factors of Goods and Services

Production Costs

These depend on the provision of factors of production and the technology used, which have a decisive influence on the selling prices of various goods and services.

Application in International Trade

This fosters international trade, as, in practice, it is very difficult for a single country to produce everything necessary to meet the preferences or tastes of its inhabitants.

Customs Territory Defined

A customs territory is a geographical area with free circulation of goods, and it does not necessarily coincide with the political boundaries of a country.

Theory of Comparative Advantage

According to this theory, countries seek to specialize in the production of goods and services they can exchange more... Continue reading "Key Concepts in International Trade & Economics" »

Factors of World Economic Growth: 1945-2007

The second half of the twentieth century (1950-2000) witnessed unprecedented economic and population growth, improving living standards globally. World population more than doubled, rising from 2.5 billion in 1950 to 6 billion in 2000. Production increased over sevenfold, leading to a near tripling of per capita income, despite the population surge. This was achieved with reduced working hours due to significant productivity improvements. Individuals enjoyed more goods, leisure time, better health, and education. However, inequality, poverty, and hunger persisted.

The Golden Age (1950-1973)

This period, also known as the War Boom or Trente Glorieuses, was characterized by stable, regular, and intensive... Continue reading "Global Economic Growth: 1945-2008" »

The Formation of the Corporation

France

French corporations were smaller compared to those in the U.S., England, and Germany. They were often family-dominated and had a close relationship between management and ownership. Examples include Renault cars and Michelin rubber. These corporations featured simple management structures, strong organizational skills in production, but weaker distribution capabilities.

Factors Limiting Concentration:

• Small market size
• Existence of a dense distribution network
• Industry expertise focused on quality goods

Forms of Cooperation:

• Restrictive sales promotion through specific organizations
• Innovation through holding groups of companies that controlled legal and stock exchange matters
• Mergers, which emerged in the early

Factoring entities are financial operations, with or without the right of recourse and its maturity. Commercial credits are generated against their clients (invoices, receipts, bills of exchange, etc.). The factoring entity is in charge of putting these credits into circulation, collecting them, accounting for them preferentially, and establishing the form and period of effect with client meetings, assuming the risk of the holder's insolvency.

Contract Elements

Personal Elements

1. Factoring entity: Analyzes the solvency of clients and, once accepted for the assignment, performs a function of 1% of the determined credit for each client. It assumes the risk of insolvency of the assigned credit and manages its collection in exchange for a commission

In the short term, some companies can convert fixed or variable costs to fixed costs. Generally, fixed costs, such as rent for premises, are independent of the level of production. Variable costs are proportional to the volume produced.

Types of Costs

• Direct Costs: These can be directly related to the production of a product or a specific department.
• Indirect Costs: These relate to multiple departments or products, making direct allocation difficult.

Productivity

Productivity is the relationship between the quantity of output produced and the quantity of resources used to achieve that production.

Gantt Chart

A Gantt chart is a visual tool where the horizontal axis represents the time needed to complete a task, and the vertical axis lists the activities... Continue reading "Business Operations: Costs, Productivity, and Marketing" »

Key Business Approaches

3 Approaches:

• Work and organizations (planning, organizing, controlling)
• People (communication, motivation, leadership, work group formation)
• Production and operations

Essential Entrepreneur Skills

5 Critical Entrepreneur Skills:

• Leadership
• Communication
• Decision-making
• Teamwork
• Strategic Vision

Common Entrepreneurial Mistakes

5 Mistakes:

• Unclear goals
• Trying to prove you're smart
• Greed
• Hiring people they like instead of need

The 3 C's of Business

3 C's:

• Company
• Customers
• Competition

Start-Up Costs

Start-Up Costs:

1. Expenses (legal structure, workspace, remodeling, stationery, logos, web page)
2. Purchase assets (inventory, office supplies)
3. Ongoing monthly expenses (rent, utilities, payroll, insurance)
4. Monthly sales projections

Business Plan Components

Executive

Understanding Demand and Supply

A shift in the demand curve signifies a change in the quantity demanded at any given price. This is visually represented by a shift of the demand curve to a new position, resulting in a new demand curve.

Movements Along the Demand Curve

A movement along the demand curve represents a change in the quantity demanded of a good as a result of a change in its price.

Shifts in the Demand Curve

• A rightward shift reflects an increase in the quantity demanded at any price level.
• A leftward shift reflects a decrease in the quantity demanded at any price level.

Supply Curve Dynamics

A shift in the supply curve represents a variation in the quantity supplied at any given price. This is reflected in a shift of the supply curve to... Continue reading "Demand and Supply: Shifts, Movements, and Market Equilibrium" »

The Law of Supply

The Law of Supply illustrates the relationship between the price of a good and the quantity supplied.

The Supply Curve

The Supply Curve is an upward-sloping curve that illustrates the relationship between price and quantity supplied.

Market Supply

Market Supply refers to the sum of all individual supplies from all sellers of a good or service. Graphically, individual supply curves are added horizontally to derive the market supply curve.

Determinants of Supply

Key factors influencing supply include:

• Market Price
• Input Prices (Factors of Production)
• Technology
• Expectations
• Number of Producers

Changes in Quantity Supplied vs. Supply Changes

A change in the quantity supplied refers to a movement *along* the supply curve, resulting solely from... Continue reading "Understanding Market Dynamics: Supply and Demand" »

Public Budget and the Economic Cycle

Understanding Deficits

• Deficit: A flow of new debt created when the state spends more than it collects in taxes.
• During recessions, public transfers increase and tax revenues decrease, leading to an increased budget deficit.
• Cyclical Deficit: The portion of the budget deficit that fluctuates with the economic cycle. It increases during recessions (when production is below potential GDP) and decreases during expansions (when production exceeds potential GDP).
• Structural Deficit: The portion of the budget deficit that remains independent of the economic cycle, stemming from structural imbalances between revenue and public expenditure. This is the deficit that persists even when production reaches its potential

Understanding Macroeconomics: Objectives, Instruments, and GDP

Macroeconomics deals with the study of phenomena that affect the entire economy, among which are inflation, unemployment, and macroeconomic growth. To analyze the performance of the economy, macroeconomics focuses on the study of Gross Domestic Product (GDP) or the general price level to make it easy to set concrete targets and design macroeconomic policy. This integrated set of measures, designed by the government to influence the progress of the economy as a whole, aims for objectives such as the growth of production, employment, and price stability.

Key Objectives of Macroeconomics

• Production Growth

  Having an abundant amount of goods and services is something all countries desire.