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

Eight Principles of Security Policy Management

A) Security Policy and Leadership

Senior management establishes unity of purpose and direction through policies across various disciplines. Security policy must be led and upheld by top management to create an internal environment where everyone can contribute to achieving goals and objectives.

B) Customer Focus

Organizations depend on their customers and should understand their current and future needs, meet their requirements, and strive to exceed expectations. Customers include external clients, internal stakeholders, shareholders, and society in general.

C) Staff Participation

Staff at all levels are essential, and their full involvement enables their abilities to benefit the organization.

D) Process

Consumer Behavior: An Economic Perspective

The Roots of Consumer Behavior in Economic Thought

The study of consumer behavior emerged from the exploration of economic principles, particularly the concept of utility, or satisfaction derived from consumption. Early economists like Adam Smith and Jeremy Bentham were among the first to formally examine consumer behavior. They posited that consumers, acting as "economic men," make rational choices based on cost and value to maximize their satisfaction given limited time, energy, and money.

The Concept of Economic Man and Utility

Economic theory traditionally portrays humans as rational buyers, possessing complete market information and striving for the best possible outcomes in their purchasing decisions.... Continue reading "Consumer Behavior: Understanding the Economics of Choice" »

The structure organizing the work within a company directly impacts the perception that a worker can have of their working conditions and professional achievements. A highly vertical organizational structure with a long chain of command and control sections does not work well in the short term for teams. In contrast, horizontal structures best facilitate teamwork. The organizational structure influences the number of rules, procedures, paperwork, and other limitations that are encountered by workers in developing their work. There are six key elements considered in the organizational structure of an enterprise:

• Work specialization
• Bureaucracy
• Departmentalization
• Chain of command
• Centralization and decentralization
• Formalization

Entrepreneur Motivation

It... Continue reading "Key Elements of Organizational Structure & Employee Motivation" »

Production: A Three-Point View

Production can be defined in several ways:

• Economic: The development of products from basic productive resources by companies, to be purchased or consumed by households.
• Technical perspective: A combination of elements, such as labor, raw materials, machinery, energy, and direction, based on monitoring and observation of procedures (technology) to obtain goods or services.
• Utility-function perspective: A process that adds value to things, creating useful goods; in other words, it adds value.

Productive Factors

To produce, a series of elements need to be combined:

• Natural Resources: Raw materials, supplies, and energy.
• Labor: The workforce or the time that workers dedicate to production/service.
• Capital: The set of necessary

Key Economic and Business Definitions

Tariff

A tax levied on the price of a product when it crosses the border into a country, with the objective of protecting domestic production from foreign competition. Thus, policies of market liberalization and those promoted by the World Trade Organization (WTO) tend to lower tariffs to stimulate free international trade.

Balance of Payments

Reflects all economic transactions made by a country with the rest of the world. This includes the trade balance, services, capital flows, and migrant remittances. This balance is often in deficit in Spain, and would be even more so without significant tourism income.

Balance of Trade

A crucial component of the balance of payments, it specifically includes the exports and... Continue reading "Essential Economic and Business Concepts" »

Types of Markets

Markets can be classified based on various criteria:

Based on Information and Transparency

A transparent market is one where agents are related and have all possible information. A market has friction when agents do not have all possible information.

Based on Goods Characteristics

A perfect market exists if the commodity traded is perfectly homogeneous. An imperfect market exists when the commodity is available in various models with different features.

Based on Player Power

A normal market is one where neither buyers nor sellers have the power to intervene in the market price. A forced market exists when they can act on the price.

Based on the Number of Participants

Markets can also be classified according to the number of buyers and... Continue reading "Economic Market Structures and Factors" »

Key System: Mixed Economy

• Inequality in the initial allocation of property
• Collective basic needs
• Natural monopolies

MARKET FAILURES:

• Cycle (the market cycle is critical, not growing)
• Externalities (effects outside a company)
• Public goods (the market has great agility to respond to the demand for private goods, but cannot provide the amount of public goods needed)
• Lack of competition (monopoly)
• Equity (the market generates a very uneven income distribution)

Cycle:

Boom, Recession, Depression, Recovery

Or Neo-Monetarists	Neo-Keynesians
Heirs to the tradition of liberalism They claim the full autonomy of the market The state should limit itself to ensuring a free market and controlling the amount of money and inflation. They criticize the weight of the state

... Continue reading "Understanding Mixed Economy and Market Failures" »

Families and Households in the Economy

Families or households are primarily responsible for consumption. They make decisions about which consumer goods and services to choose to satisfy their needs. Their ability to spend depends on their income.

The circular flow of income describes the continuous flow of payments for goods and services between households, companies, and the public sector.

The Role of the Public Sector

The public sector consists of various public authorities operating at typically three levels of government:

• Local government: City councils and provincial bodies.
• Regional government: Autonomous regional administrations.
• Central administration: National government, ministries, etc.

The public sector uses several instruments to conduct... Continue reading "Economic Fundamentals: Families, Government, and Systems" »

Understanding Key Economic Concepts

Income Elasticity of Demand

Income elasticity of demand describes the direct proportional relationship between income and demand. Generally, as income increases, demand increases, and vice versa.

There are at least three types of goods based on income elasticity:

• Normal Goods: Demand (D) evolves directly proportional to income (I). (E_y > 0)
• Neutral Goods: Demand remains constant as income changes. (E_y = 0)
• Inferior Goods: Demand evolves inversely with respect to income. (E_y < 0)

Market Analysis: Equilibrium & Surplus

Mathematics for Market Analysis

To determine market equilibrium, the supply and demand functions are matched to find the equilibrium price and quantity.

Consumer Surplus

Consumer surplus represents... Continue reading "Essential Economic Concepts: Market Dynamics & State Intervention" »

Distribution: Key to ensuring products reach consumers effectively. Product Processes: Saving the product: Products aren't always sold whole; modifications can reduce storage costs. Physical Distribution: Ensures clients receive products in perfect condition. Billing and Collection: Essential for the sales process. Distribution Strategy: Three alternatives exist based on the number of intermediaries: Exclusive distribution: Sales through a single intermediary. Selective distribution: Choosing a specific number of distributors. Intensive distribution: Manufacturer aims for widespread availability across many outlets. Promotion: Aims to increase sales by highlighting product benefits. Advertising: Transmitting messages via media to inform and... Continue reading "Marketing Strategies: Distribution, Promotion, and Quality Management" »