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

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 the Chart of Accounts

The Chart of Accounts is a fundamental framework born from the normalization of accounting practices. This standardization aims to establish consistent criteria for companies, enabling homogeneous, reasonable, and valid comparisons across different periods and entities.

EU Directives for Accounting Normalization

The European Union (EU) has issued a set of rules to implement accounting normalization in its participating countries. These directives are crucial for harmonizing financial reporting:

• The Fourth Directive: Also known as the European Accounting Plan, this directive establishes the financial information that corporate accounting should provide.
• The Seventh Directive: This directive sets the requirements

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.

The Entrepreneur

An entrepreneur is a person who takes the initiative and assumes the risk in a company. This individual may be referred to as an autonomous social agent and is a leader in a cooperative or commercial enterprise.

Concept of Business

A business is an economic production unit whose purpose is to create or increase the utility of goods and meet human needs. The end goal of the company is to achieve the objectives it has set, seeking to maximize its benefits.

Company Features

• Common: Accounting, financial, administrative, and HR.
• Specific: Commercial, production, research.
• Other: Technical, security, R&D.

Elements of a Company

• Internal:
  • Materials: Land, buildings and installations, machinery and transport elements, stocks, money, clients,

Service Economy

It is an economic and social transformation that primarily affects developed countries since the last phase of the industrial revolution. It is not only that the employed population in the tertiary sector (services) becomes larger than the secondary sector (industry), but also how the work itself in this sector is increasingly disseminated and outsourced.

Welfare State

A more specific concept, which in practice is considered a category to designate either a set of proposals or a general approach regarding how the state should or could proceed. For example, the Spanish state provides education and healthcare.

Rural Tourism

A tourist activity that is performed in a rural area, usually in small towns or outside the village in larger... Continue reading "Fundamental Economic and Tourism Terminology" »

Labor Market Characteristics

The labor market is influenced by various factors, including how companies and unions affect wages. Work is not a homogeneous product; several factors determine salary and compensation differences:

• Wages for workers in dangerous jobs tend to be higher.
• Differences in talents and skills.
• Differences in human capital: more skilled and prepared individuals are generally better paid.
• Efficiency Wages: A type of wage used by some companies to incentivize and motivate their workers to increase productivity.
• Discrimination: Men often receive higher wages.

Causes of Unemployment

Neoclassical Theory

If the labor market operated freely and wages were flexible to lower and raise, there would be no unemployment, even with a serious... Continue reading "Labor Market Dynamics: Unemployment Causes and Job Creation" »