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

Explain the differences and concerns with performance measures

Different types of Performance Measures. 2 types of measures:

• Objective Measures: quantitative and based on counts of behaviors or outcomes. Ex: number of students in a class, multiple choice exam.
• Subjective Measures: qualitative and based on judgments from raters.

Explain the value of using multiple sources for performance appraisal ratings

Common Problems with Performance Measures (1/2) Rater Errors. Rating errors occur when:

1. Raters provide assessments that follow an undesirable pattern.
2. The rater does not properly account for factors that might influence assessments.

A common error is central tendency error, which is the pattern of placing almost everyone in the middle of the scale.... Continue reading "Performance Measures, Appraisals, and Compensation Practices" »

Fundamental Business Concepts

The primary purpose of a business: A business seeks to make a profit by selling goods or services to others.

For-Profit vs. Non-Profit Organizations

A for-profit business is an organization formed to make money, or profits, by selling goods or services.

• A non-profit organization's purpose is not to distribute its surplus funds, or profits, to owners but rather to further its goals.

Key Business Terminology

Revenue: The total amount of money that the selling of goods or services produces for a business during a defined period of time.

Goods: Tangible products (items you can touch).

Services: Intangible products (items you cannot touch).

Profit: The amount of money a business makes after paying for its salaries and all other... Continue reading "Business Fundamentals and Social Responsibility Models" »

1. Price Regulation

The objective is to avoid excessive pricing for consumers while ensuring:

• Cost recovery and investment recoupment over a period.
• Fostering forthcoming investments.

Options include:

• Cost-Plus Pricing: Calculating Average Cost (AC) and granting a markup. Caution: May dilute incentives for efficiency gains and cost cutting.
• Price Capping: Setting an absolute pricing level as a threshold. Caution: May dilute incentives for furthering investments if the time frame is insufficient.

2. Non-Discriminatory Access

Aimed at enabling non-network carriers access to the network on fair, transparent, and non-discriminatory terms.

3. Corporate Unbundling

Guarantees the healthy functioning of competitive markets by curbing the competitive advantage... Continue reading "Market Regulation Tools and Public Service Obligations" »

CPK Financial Strategies

Shareholder Compensation Methods

CPK has several methods to compensate shareholders:

1. Dividend Payout: CPK must decide to pay a dividend as another method to compensate shareholders.
2. Share Repurchase: It could carry out a share repurchase, which is a transaction where a company buys back its own shares from the marketplace. A company might buy back its shares because management considers them undervalued. CPK’s share price has declined 10% in the recent period, so by repurchasing shares it would create a positive signal to the stock market, resulting in an increase of stock price, and it would generate incremental economic value.
3. Dividend Policy: It could also carry out a dividend policy, which is the policy a company uses

Chapter 8: Individual Taxation

The Marriage Penalty occurs when a couple's tax liability is greater when filing married jointly than if both had filed under single status.

The Kiddie Tax applies to a child if:

1. They are ≤18 years old at year-end,
2. They are 18 at year-end but earned income ≤ half of their support, or
3. They are 18 ≤ age ≤ 24, a full-time student, and earned income ≤ half of their support.

If the Kiddie Tax applies, net unearned income (NUI) can be taxed at their parent's marginal tax rate. NUI is income in excess of $2,100.

Alternative Minimum Tax (AMT) is often caused by high capital gains, multiple children, and high state taxes. After multiplying the AMT base by the AMT rate, subtract the regular tax liability from this amount.... Continue reading "Tax Rules for Individuals and Businesses: Key Concepts" »

Business Ownership and Legal Structures

Partnership: A business owned and operated by two or more persons as a voluntary legal association.

• Limited Liability Partnership (LLP): The partnership limits the risk of loss of personal assets. The liability of each partner—and the risk of losing personal assets—is limited to just his or her own acts and omissions and those of his or her directly reporting employees.

Corporate Entities

C Corporation: A state-chartered entity that pays taxes and is legally distinct from its owners. This structure is favored by big businesses.

S Corporation: A corporation with no more than 100 owners (shareholders). Like a partnership, the owners are taxed only at the personal level, rather than the corporate level.

Limited

Outsourcing

Outsourcing is a business practice in which a company hires another company or an individual to perform tasks, handle operations, or provide services that were either usually executed or previously done by the company's own employees.

Marketing Mix (MX)

Essential to the set of actions, or tactics, that a company uses to promote its brand or product in the market. The 4 Ps make up a typical marketing mix: Price, Product, Promotion, and Place, including packaging, positioning, people, and even politics.

Raw Materials

Raw materials are materials or substances used in primary production or manufacturing.

Trade Union

A trade union is an organization whose membership consists of workers and union leaders, united to protect and promote their... Continue reading "Business Terminology Glossary" »

Understanding Governmental Proprietary Funds and Business Activities

Key Macroeconomic Indicators and Concepts

• GDP (Gross Domestic Product): The volume of production within a country’s borders; it includes everything produced in a country regardless of the origin of the factor of production.
• GNP (Gross National Product): The value of all final goods and services produced by a country’s factors of production and sold in the market in any given period.
• Consumption: The portion of GNP purchased by private households.
• Investment: The portion of production consumed by private companies to produce their own output.
• Government Purchases: All the consumption and investment activities of local and national authorities.
• Unemployment: The ratio between people actively seeking employment and the active population.
• Productivity:

Good Supplier Selection

To value and compare:

• Qualities
• Prices
• Discounts
• Terms
• Cost of Transportation
• Packaging
• Payment
• Customer Service
• Long-term Relationship Potential

Supplier Comparison Table

Prepare a comparative table showing all offers:

• Prices
• Quality
• Payment Terms
• Delivery
• Discounts
• Etc.

Importance of Transportation

Transportation is important because it involves the transfer of goods. Consider freight costs (noli), freight services, and insurance, especially for expensive products, to ensure their safety and potentially save costs.

Managing Long Delivery Times

Regarding delivery: If payment is late, the seller typically has the right to charge interest. Payment is normally due fifteen days after delivery of the product, allowing the buyer time to verify... Continue reading "Supplier Selection and Evaluation" »