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

The Impact of Declining Oil Prices on the Global Economy

The most relevant issue in recent economic news is the spectacular decline in petroleum prices over the past several months, with its economic value falling by 46% since last June.

Nowadays, petroleum is considered the most important energy source, leading many countries to base their economies on petroleum and its byproducts. Therefore, it is widely known as 'black gold'.

Global Demand and Price Fluctuations

In July 2014, the International Energy Agency (IEA) predicted that worldwide demand would increase by 1.4 million barrels per day (bpd) in 2015. However, these projections were revised three months later. Demand growth was lower than expected due to slower global economic growth and... Continue reading "Oil Price Decline: Economic Impact and Market Dynamics" »

Chapter 3

1- Define The marketing environment? Includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers.

2- Define Micro environment?

A microenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

1. The Company: In designing marketing plans, marketing management takes other company groups into account. These interrelated groups form the internal environment.
2. Suppliers: Are those firms and individuals that provide resources needed by the company and its competitors to produce goods and services. Suppliers provide

Improvement methods:

1. Lean manufacturing is a system for maximizing product value. Six Sigma is a problem-solving methodology that uses its collection of tools to fix a specific project over a specific time period. All Six Sigma’s resources are targeted on this one project until the problem is fixed. While Lean Manufacturing encourages daily, general improvements, Six Sigma demands data-based, specific improvements for specific projects.

Six sigma:

Set of techniques and tools for process improvement. Their strategies seek to improve the quality of the output of a process by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes.

The 6 Sigma method thus poses as a fundamental principle:... Continue reading "Lean Manufacturing and Six Sigma: Methods for Quality Improvement" »

SMALL BUSINESS:Any independently owned and operated business that is not dominant in its competitive área.

SHARING ECONOMY

• An economic model involving the sharing of underutilized resources 

•  Entrepreneurs earn income by renting out an underutilized resource such as lodging or vehicles 

•  Uber is an example 

•  Referred to as the “gig economy” 

• Are workers independent contractors or employees? 

EQUITY FINANCING:Referred to as equity financing because the owner uses real personal assets rather than borrowing funds from outside sources to get started in a new business.

Can also obtain equity financing by finding investors for their operations and selling stock in the business to family members, friends, employees or other investors.

VENTURE

How Economic Activity Works

Arable farming is one example of economic activity. The concept of economic activity refers to jobs performed by people to satisfy society's needs and to generate wealth.

Production

Production involves the creation of goods and services. This includes:

• Types of goods depending on production.
• Intermediate goods.
• Provision of services.

Distribution

This refers to the delivery and state of goods and services. There are two primary steps in sales:

• Wholesale
• Retail

Consumption

Consumption is the use of a good or service to satisfy personal needs. There are two types of goods depending on consumption:

• Durable goods
• Non-durable goods

Factors Affecting Production

Production relies on various resources and capital:

• Human Capital: Includes

Factors Causing an Outward Shift in SRAS

Explain two factors that could cause an outwards shift on the Short-Run Aggregate Supply (SRAS):

1. Costs of factors of production: Favorable changes in non-price factors that affect aggregate supply will shift the SRAS curve to the right.
2. Indirect taxes/lower production costs: This would lead to lower average prices in the economy and subsequently cause an expansion in Aggregate Demand.

Monetary Policy Fundamentals

Define monetary policy: The government’s control and use of interest rates and the money supply to control levels of inflation.

Expansionary Monetary Policy

Explain expansionary monetary policy: This policy aims to increase Aggregate Demand in the economy. Lower interest rates lead to a shift to... Continue reading "Macroeconomic Policy and Aggregate Supply Analysis" »

Consumer Optimization

The budget constraint (BC) is defined as: P₁X₁ + P₂X₂ = M, where the slope is -P₁/P₂ = dX₂/dX₁. The consumer optimizes consumption decisions by reaching the highest satisfaction level given their resources. Any point on the BC other than the equilibrium is non-optimal, as it won't be on the highest indifference curve.

The Marginal Rate of Substitution (MRS) is -MU₁/MU₂, representing the slope of the indifference curve.

Firm Optimization

Profit Maximization

Profit = Py - w

Profit maximization occurs when marginal revenue (MR) equals marginal cost (MC).

• When MC = MR, the firm achieves maximum efficiency.
• When MC < MR, the firm is inefficient and should increase production.
• When MC > MR, the firm is inefficient and should reduce

Unemployment Types and Dynamics

Unemployment is a multifaceted economic phenomenon, categorized into several distinct types based on its underlying causes.

Frictional Unemployment

Frictional unemployment arises because both workers and firms need time to locate each other and to digest the information about the value of a potential job match. It is a natural part of a dynamic labor market.

Structural Unemployment

Structural unemployment occurs if the skills or characteristics of persons looking for work do not "fit" the jobs available. This mismatch can be due to technological changes, shifts in industry, or geographical immobility.

Cyclical Unemployment

Cyclical unemployment arises because the economy has moved into a recession. During such periods,... Continue reading "Labor Market Concepts: Unemployment, Wages, and Discrimination" »

The 2008 Economic Crisis and Unemployment

In 2008, a significant economic crisis began, impacting the entire world, especially Europe. The most noticeable consequence has been high unemployment.

Understanding the Unemployment Rate

The unemployment rate is the percentage of the total labor force that is unemployed but actively seeking employment and willing to work.

Unemployment Trends in the European Union (2008-2014)

In the European Union, between the start of the crisis in 2008 and 2013, the unemployment level rose to a rate of 10.9%. However, since 2013, it has begun to decrease, reaching 9.9% by the end of 2014, largely due to the slow recovery of the economy.

European Countries with Varying Unemployment Rates

Currently, countries with lower unemployment... Continue reading "Unemployment in Europe: Crisis, Youth, Long-Term, and Brain Drain" »