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

Core Marketing Principles Explained

What Is Marketing?

Marketing is a dynamic discipline encompassing technical and political, objective or subjective strategies. Its success depends on the activity of entering the market. Its use became widespread, evolving into an essential term for business. While synonymous with the Spanish terms "mercadotecnia" and "mercadeo," "marketing" was adopted among Spanish speakers. It affects not only business operations but also the entire company structure, which has adapted to meet the challenges of this strategy. Marketing is a process by which companies generate profits by offering goods and services in appropriate markets at suitable and profitable prices, using appropriate promotion and precise advertising... Continue reading "Core Marketing Principles: Definition, Evolution & Research" »

Strategic Business Location and Dimension

Choosing a suitable place for company implementation requires assessing a number of external variables:

1. Market Demand: Analyze if there is interest in the product in the desired area and assess the competitive landscape.
2. Raw Material Procurement: Evaluate the quality, cost, and ease of obtaining raw materials.
3. Labor Market: Consider potential employees, their skills, and labor costs.
4. Communications and Transportation: Assess accessibility for transport and communication with other businesses.
5. Utilities and Supplies: Information on the availability and cost of essential supplies for company operations.
6. Construction and Land Costs: Note that prices vary significantly from place to place.
7. Legislation and Regulations:

Macroeconomic Figures and Measurement Challenges

Macroeconomic figures are typically measured using three primary approaches:

• Cost (C)
• Production (O)
• Income (Y)

Difficulties in Measurement

Accurately measuring these figures presents several challenges:

1. Heterogeneity of Products: The variety of products makes assessment difficult, especially for non-market goods and services (avoiding products not assessed in monetary terms).
2. Variation in Prices: Dealing with price fluctuations requires using constant prices to ensure meaningful comparisons.
3. Double Counting: To prevent overestimation, only value added should be counted.
4. Non-Economic Activities: Certain activities, such as some sports or illegal activities, are not economically accounted for (they escape

Business Integration in the Economic System

Companies are fundamental production units that create value, driving the flows of energy, materials, and money within the economic system.

They detect consumer needs and meet them through the development of goods or services. This interaction generates cash flow: a cost for consumers (purchase price) and sales revenue for the company.

All these activities occur within a fundamental element of the economic system: the market for goods and services.

To produce goods and services, companies utilize several fundamental operational factors, generally including:

• Materials: Provide the basis for production processes.
• Equipment: Used for manufacturing and/or assembly.
• Energy: Powers machinery and operations.
• Labor:

Autarky, Rationing, and Economic Policy

Autarky and rationing: One of the main objectives of the first stage was achieving economic self-sufficiency. This promoted an economic policy of insulation from the exterior and the replacement of the free marketplace by state intervention in the economy, justified with fascist and patriotic rhetoric. Autarkic policy had three stages of action.

1. Regulation of foreign trade: Imports and exports were completely controlled by the state. This measure restricted foreign exchange and reduced imports of goods considered essential. The result of these restrictions was higher prices and severe shortages of consumer goods.

2. Development of industry: A series of laws favored the creation of public enterprises and the

Economic Cycles

Fluctuations in economic activity, characterized by the expansion or contraction of output and employment in most sectors of the economy.

• Expansion: Increases GDP and creates more jobs.
• Recession: Economic resources, workers, and factories sit idle.

Externalities

Situations arising when the activity of a company or a consumer creates external effects that impact third parties. These may be positive for society (social benefits) or negative (social costs).

• Consumption Externalities

  • Positive: Examples include healthcare and education, where the state provides grants to encourage consumption.
  • Negative: Examples include tobacco and alcohol, where the state imposes sanctions and taxation to reduce consumption.

• Production Externalities

  • Positive:

Goods and Services

Who Produces Goods and Services?

Individuals with specific skills tend to be more productive. Specialization is key to efficient production and acquisition of goods and services.

Why Specialization?

The division of labor and exchange promotes productivity.

Factors of Production

• Earth
• Labor
• Capital

These factors combine to generate natural resources (raw materials), which are then transformed into finished products. The ultimate goal of production is profit.

Capital

Capital encompasses machinery, manufactured goods, large-scale plants, and inventories of finished and unfinished materials (excluding human resources).

Natural Capital

Natural resources are considered natural capital when they become a source of profit.

Human Capital

Human capital... Continue reading "Production, Economic Factors, and Agents" »

Economic Consequences of Unemployment

• Decreased aggregate demand.
• Increase in the public deficit.

Social Effects of Unemployment

• Negative psychological effects.
• Discrimination.

Factors Influencing Unemployment

• Demographic factors.
• Technological changes.
• Openness to international trade.
• Phase of the economic cycle.

Policy to Combat Unemployment

• Act on the Aggregate Demand (DA).
• Act on the Aggregate Supply (OA).

9.5. The Economic Cycle

The economic cycle involves fluctuations in Gross Domestic Product (GDP) and employment, driven by factors leading to expansion and recession.

Phases of the Economic Cycle

• Expansion
• Peak
• Recession
• Trough (Background)

10.1. State Intervention in the Economy

Keynesian Economists

Followers of J.M. Keynes:

• They reject the hypothesis that

Tourism: Advantages and Disadvantages

Tourism involves tourists traveling outside their usual environment to experience other cultures for leisure, business, or other purposes.

Advantages of Tourism

• Family Integration: Tourism fosters dialogue and unity within families.
• Natural Resource Utilization: Tourism showcases natural resources, creating new attractions.
• Tourist Security: Enhanced security measures increase tourist confidence.
• Conservation: Preservation of historical and tourist sites protects cultural heritage.
• Job Creation: Tourism projects generate employment opportunities.

Disadvantages of Tourism

• Cultural Loss: Communities may experience cultural erosion due to changing environments.
• Environmental Pollution: Poor management can lead to pollution,

What is Economic Activity?

Economic activity is any process through which we obtain products and services that meet human needs. It encompasses three stages:

• Production
• Distribution
• Consumption

Economic Sectors

The economy is divided into three main sectors:

• Primary Sector: This sector involves obtaining raw materials from nature (e.g., farming, mining, fishing).
• Secondary Sector: This sector transforms raw materials into finished products (e.g., manufacturing, construction).
• Tertiary Sector: This sector provides services to society (e.g., healthcare, education, finance).

Gross Domestic Product (GDP) and GDP Per Capita

GDP is the total value of goods and services produced in a territory within a year.

GDP per capita is calculated by dividing the GDP of... Continue reading "Understanding Economic Activity and Systems" »