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

Marketing Orientation - An outward looking approach basing product decisions on consumer demands as established by market research. The business attempts to produce what consumers want, this requires market research and market analysis to indicate consumers demand.

Benefits - Newly developed products failing are reduced. Consumers' needs are being met with appropriate products.Product Orientation - An inward looking approach that focuses on making products that can be made or have been made for a long time and trying to sell it. Invent products with the belief that they will find consumers to purchase them.Commercial Marketing - Satisfying consumers' needs for profit.

Chapter 1: Economic Foundations and Models

I. What is Economics?

Economics is the study of how people and societies choose to allocate scarce resources. It explores how individuals, businesses, and governments make decisions in the face of limited resources and unlimited wants.

Resources:

• Inputs, factors of production
• Goods or services used to produce other goods or resources

Primary Factors of Production:

• Labor (mental, physical)
• Capital (tools, equipment, structures)
• Land (natural resources like water, oil)

Scarcity:

• The fundamental economic problem: resources are limited.
• We face constraints in our choices.
• Economics seeks to determine the best allocation of scarce resources.
• The goal is to maximize utility (satisfaction) in the face of scarcity.
• Without

1. BUSINESS AND THE NEW TECHNOLOGIES (TECHNOLOGICAL GROWTH)

Introduction

This study analyzes new technologies, their origins, and their development, exploring the rise of technology and its relationship with businesses and society.

Origin of New Technologies

The technological bubble of the 1990s, marked by the birth of the internet and the end of the Cold War, sparked the development of new technologies. This period led to globalization, with economies striving for technological and economic advancement. High-end computers with operating systems like Windows NT (1990), 95, 98, XP, or IOS emerged, streamlining administrative processes and business operations.

Effects of the New Technologies

The effects of new technologies are evident in both society... Continue reading "The Impact of New Technologies on Business and Society" »

Perf Elasticity

(Edp=8) when a minute change in price brings infinite change in Qd, demand is considered to perf elastic. Coefficient of elasticity of demand is equal to infinity here. Parallel to X-axis

Highly Elastic Demand

when a small percentage change in price results in high % change in Qd is highly elastic in nature, coefficient of elasticity in demand is greater than one.

Perf Inelastic Demand

when a big % change in price in price fails to bring any change in Qd the demand id perf inelastic. equal to 0.

Law Of Supply

other than things remaining the same, when price of a commodity increases its quantity supply also increases, and when price of commodity decreases its quantity supply also decreases.

Market Equilibrium

it is a state of balance... Continue reading "Understanding Economic Concepts and Theories" »

Business Entities and Tax Implications

Taxation of Partnerships

Partnerships are not taxed at the corporate level. Instead, taxes are levied on the individual partners based on their share of the partnership's income.

Taxation of Corporate Entities

Corporations have a separate legal personality and are subject to corporate income tax. Shareholders are also taxed on the dividends they receive.

Justification for Corporate Income Tax

• Avoid tax deferral
• Neutrality
• Incentivize investment

Tax calculation: Tax = Tax Base x Tax Rate

Corporate and Shareholder Tax Systems

Classical System

Corporate profits are taxed at the corporate level, and dividends are taxed again at the shareholder level, resulting in economic double taxation.

Full Integration System

Corporations... Continue reading "Understanding Corporate Taxation: Systems, Distributions, and Debt-Equity Considerations" »

Optimizing Customer Relationships

Customer and Firm Advantages

Customer Benefits

• Confidence
• Social Connection
• Special Treatment

Firm Benefits

• Economic Gains
• Improved Customer Behavior
• Enhanced Human Resource Management

Navigating Relationship Challenges

• The customer is not always right
• Targeting the wrong segment
• Customers not profitable in the long term
• Managing difficult customers

Effective Defection Management

A systematic approach to retain customers before they defect. This contrasts the concept of zero defects (Total Quality Management) with zero defectors.

Defection Management Process

1. Develop a zero-defections culture.
2. Communicate this goal to employees.
3. Train employees in defection management techniques.
4. Tie incentives to defection rates.
5. Develop switching

Contract Manufacturing

Contract manufacturing is the term used to refer to manufacturing that is outsourced to an external partner—one that specializes in production and production technology.

Benefits

• Labor cost advantages
• Savings via taxation
• Lower political and economic risk
• Quicker access to markets

Caveats

• A contract manufacturer may become a future competitor
• Lower productivity standards
• Backlash from the company’s home-market employees regarding HR and labor issues
• Issues of quality and production standards

Licensing

Licensing refers to the exchange of rights to another party in exchange for payment.

Rights Covered by Licensing

• Patent covering a product or process
• Manufacturing know-how not subject to a patent
• Technical advice and assistance
• Marketing

Of all the major inventions of the twentieth century, few have had a more profound impact on people’s lives than radio and television. By 1933, two-thirds of American homes had at least one radio, twice as many as those with telephones. Forty-five years later, 97 percent of all households had at least one television set. But the numbers cannot convey the contradictory roles that broadcasting has played in American society as it has reshaped the country’s politics, economy, and culture.

Role in American Society

The broadcast media have allowed Americans to listen to and watch candidates for public office in order to decide for themselves who merits their support. But television has also trivialized politics, overemphasizing appearance and... Continue reading "The Impact of Radio and Television on American Society" »

Public Relations Fields

• Internal Relations: This is the specialized part of public relations that builds and maintains mutually beneficial relationships between managers and the employees on whom an organization's success depends.
• Lobbying: This is a specialized part of public relations that builds and maintains relations with the government, primarily to influence legislation and regulation.
• Issues Management: This is the proactive process of anticipating, identifying, evaluating, and responding to public policy issues that affect an organization's relationship with its publics.
• Media Relations: This involves dealing and communicating with the news media when seeking publicity or responding to reporters' questions.
• Community Relations: A public

Money Demand and Central Bank Policy

Impact of Reduced Cash Holdings

a) How does this event affect the demand for money?

If people need to hold less cash, the demand for money shifts to the left, since there will be less money demanded at any price level.

Price Level Changes Without Intervention

b) If the central bank does not respond to this event, what will happen to the price level?

If the central bank does not respond to this event, the shift to the left of the demand for money combined with no change in the supply of money leads to a decline in the value of money (1/P), which means the price level rises, as shown in Figure 1.

Stabilizing the Price Level

c) If the central bank wants to keep the price level stable, what should it do?

If the central... Continue reading "Market Dynamics: Money Demand and Labor Union Impacts" »