Notes, abstracts, papers, exams and problems of Economy

Approaches to Business Market

Production Orientation: Industrial Revolution

Characterized by the principle that all produced goods are sold. This approach prevailed during the Industrial Revolution, where new products were readily sold.

Product Orientation: Since the First Half of the Nineteenth Century

The focus shifted to producing goods with a certain degree of quality, assuming they would sell at an acceptable price.

Sales Orientation: Economic Growth Since the Second Half of the Nineteenth Century

A strong sales network was seen as the solution to output production in a competitive environment.

Marketing Orientation

Achieving long-term goals. Marketing is often used synonymously with advertising, sales, and market research. It can have negative... Continue reading "Marketing Strategies: Consumer Behavior & Market Analysis" »

Oligopoly

An oligopoly refers to a market dominated by a small number of sellers offering similar products to a large number of buyers. These sellers can either collude to set prices, effectively acting as a monopoly, or compete against each other.

Collusive Oligopoly

In a collusive oligopoly, sellers cooperate to fix prices and allocate market share. This practice harms consumers through higher prices and reduced choice. Such collusion is often illegal and subject to penalties.

Price Leadership

One form of collusion involves price leadership, where a dominant firm sets prices, and other firms follow suit.

Non-Collusive Oligopoly

A non-collusive oligopoly occurs when sellers act independently and compete on factors like price and quality, benefiting... Continue reading "Oligopoly and Monopolistic Competition: Market Structures Explained" »

Understanding the Economy: Key Concepts

How does the economy function? It involves the administration or use of existing resources to meet the needs of individuals and groups.

Products vs. Services

What distinguishes products from services? Products are material or tangible objects, while services are tasks performed for individuals or groups that do not produce material goods.

Characteristics of Economic Goods

Economic goods are limited and are bought and sold.

Factors of Production

• Natural Resources: Provided directly by nature.
• Human Resources: People who contribute their work, knowledge, and experience.
• Capital: Production factors such as buildings, machinery, and equipment. This includes fixed capital (buildings, machinery, vehicles) and working

Formal Organization Models

Formal Organizations are intentionally structured groups within a company, placing each element in the most suitable position. Several models exist:

• Linear or Hierarchical Model

  Based on the principle of command, where all members report to a single superior. Advantages include simplicity and clear accountability. Disadvantages include excessive authority and potential lack of employee motivation.

• Functional Model

  Characterized by specialists focusing on specific tasks. Advantages include specialization, but disadvantages include potential conflicting orders from multiple heads.

• Advisory or Staff Model

  Features a central hierarchical structure supported by advisory departments. Advantages include specialist advice, but disadvantages

Economic Activity: Definition and Key Concepts

Economic activity refers to the set of activities performed by humans to satisfy their needs. This includes the production, distribution, and consumption of goods and services.

Types of Goods

• Consumer Goods (or Final Goods): These goods directly satisfy consumer needs, such as clothing, shoes, and furniture.
• Capital Goods (or Intermediate Goods): These are machines, tools, and other items used for the production of consumer goods.

Marketing and Distribution

Marketing involves the distribution and sale of goods and services. Key factors include storage, transportation, and the actual sale process.

• Wholesale: Wholesalers buy large quantities of products and sell them to other traders or companies.
• Retail:

Factors Complicating the Monitoring of Monetary Transmission

There are two factors that complicate the monitoring of the various channels of monetary transmission:

• First, the guidelines of such transmission are continually evolving in response to changes that occur in the functioning of the economy. This is especially true of the Euro area, due to the significant changes taking place in the financial sector for the Euro.
• Second, it should be noted that monetary policy does not work in isolation. The evolution of short-term prices is subject to the influence of various internal and external factors outside of the policy.

In this context of uncertainty, it is important that the monetary authority does not rely excessively on a single paradigm of... Continue reading "Monetary Policy: Transmission Channels and Strategies" »

Key Concepts of the European Union

Demographic Indicators

• Population Density: Calculated by dividing the area of a place by the number of inhabitants that live there.
• Urbanization Rate: Expressed as a percentage, it represents the population living in cities compared to the total population of a country or area.

EU Treaties and Their Significance

• Treaty of Paris (1951): Established the European Coal and Steel Community.
• European Coal and Steel Community: Created by the Treaty of Paris.
• Treaty of Rome (1957): Established the European Economic Community (EEC), or Common Market, aiming for the free movement of persons and goods.
• Single European Act: Promoted economic and monetary integration and strengthened structural funds.
• Maastricht Treaty: Created

The Capitalist System

Capitalism, also known as a free market economic system, is dominant in today's world. This system has four main features:

• Private Ownership: The private ownership of the means of production, including land, machinery, technology, and businesses.
• Profit Motive: The pursuit of profit as the primary engine of economic activity.
• Supply and Demand: The regulation of the quantity of products made by companies and their price is determined by the law of supply and demand. Under this law, the production and the price of an item increase when the product supply is low, and decrease when there are plenty of products to meet consumer demand.
• Free Competition: The existence of free competition means that any individual or company can

Monopoly and Consumer Harm

Monopolies reduce production to raise prices, benefiting at the expense of consumers. This conflict of interest differs from perfect competition. Monopolies cause inefficiency: consumer losses exceed monopolist gains. By producing less than where marginal cost equals market price, monopolies increase profits but harm consumers.

Reducing output and raising prices above marginal cost allows monopolies to capture consumer surplus as profit, creating deadweight loss. In a monopoly, total surplus (consumer surplus and profit) is less than in perfect competition, resulting in a net loss to society. Individuals who value the good above its marginal cost are left without it due to high monopoly prices, indicating a market failure.... Continue reading "Monopoly Inefficiencies and Economic Policy Solutions" »