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

Barter

Barter is the exchange of goods and services for other goods and services without using money.

Money

Regardless of the form it takes (e.g., euro bill), money is anything that functions as a medium of exchange, store of value, or standard of value.

Money Supply

Money supply is the sum of the cash money (coins and banknotes).

Monetary Aggregates

Monetary aggregates are broad categories that measure the money supply in an economy, established by the European Central Bank. Monetary aggregates are used to measure the money supply in a national economy.

• M1: Physical paper and coin currency in circulation, plus bank reserves held by the central bank, also known as the monetary base.
• M2: All of M1, plus traveler's checks and demand deposits.
• M3: All of

Challenges of Strategic Information Systems

Implementing strategic systems often requires extensive organizational change and a transition from one sociotechnical level to another. Such changes are called strategic transitions and are often difficult and painful to achieve. Moreover, not all strategic systems are profitable, and they can be expensive to build. Many strategic information systems are easily copied by other firms, so that strategic advantage is not always sustainable.

Unique Features of E-commerce and Digital Markets

E-commerce involves digitally enabled commercial transactions between and among organizations and individuals. Unique features of e-commerce technology include:

• Ubiquity: Available everywhere, at all times.
• Global Reach:

The Great Depression, a period of severe economic downturn, lasted from 1929 to 1939. It was the worst economic depression in the history of the United States. While economists and historians often point to the stock market crash of October 24, 1929, as the start of the downturn, the reality is that the Great Depression was caused by a confluence of factors, not just one single event.

In the United States, the Great Depression crippled the presidency of Herbert Hoover and led to the election of Franklin D. Roosevelt in 1932. Promising the nation a "New Deal," Roosevelt would become the nation's longest-serving president. The economic downturn wasn't just confined to the United States; it affected much of the developed world. One consequence... Continue reading "The Great Depression: Causes and Effects 1929-1939" »

The Great Depression

Starting with the collapse of the US stock market in 1929, the Great Depression was a period of worldwide economic stagnation and depression. Heavy borrowing by European nations from the USA during World War I contributed to instability in European economies. Sharp declines in income and production occurred as buying and selling slowed down. Widespread unemployment resulted, and countries raised tariffs to protect their industries. America stopped investing in Europe. This led to a loss of confidence that economies were self-adjusting, and President Herbert Hoover was blamed for the crisis.

Hoovervilles

Depression shantytowns were named after President Hoover, whom many blamed for their financial distress.

The New Deal

A series... Continue reading "The Great Depression and the New Deal" »

**The Definition of Business-to-Business Marketing**

Business-to-business marketing (or B2B marketing, as it is commonly known) involves the sale of one company’s product or service to another company.

**How Business-to-Business Marketing Differs from Business-to-Consumer Marketing**

The key distinguishing feature of a business-to-business market is that the customer is an organization rather than an individual consumer.

The nature of the product is not a determinant to distinguish between consumer market and business market.

Business-to-business markets are characterized by a higher concentration than business-to-consumer markets.

B2B markets are less price-elastic than B2C and might even end up more commonly having a reverse elasticity.

Dimensions:

Business Structures

Sole Traders

A sole trader is any business that is owned and controlled by one person.

Advantages of Sole Trader

• It is easy to set up as no formal legal paperwork is required.
• Generally, only a small amount of capital needs to be invested, which reduces the initial start-up cost.
• As the only owner, the entrepreneur can make decisions without consulting anyone else.

Disadvantages of Sole Trader

• The sole trader has no one to share the responsibility of running the business with. A good hairdresser, for example, may not be very good at handling the accounts.
• Sole traders often work long hours. They may find it difficult to take holidays or time off if they are ill.
• They face unlimited liability if the business fails.

Partnerships

Partnerships... Continue reading "Business Structures: Sole Trader, Partnership, Limited Company, and Franchising" »

Operations Management Fundamentals

Operations are concerned with the use of inputs to provide outputs in the form of products and services. Operations managers should consider:

• Efficiency of Production: Keeping costs low.
• Quality: Ensuring the product is suitable for its purpose.
• Flexibility: Adapting to new processes and products.

Stages of the Operation Process

The operation process involves converting a consumer need into a product that can be produced efficiently, organizing operations, deciding on production methods, and setting and maintaining quality standards.

Production and Productivity

• Production: The process of converting inputs into outputs.
• Level of Production: The number of units produced during a specific time period.
• Productivity: The

Understanding Complementary Goods

Definition: Products A and B are considered complements if the utility of the combination is greater than the sum of their individual utilities: U(A+B) > U(A) + U(B).

Symmetry: A is a complement to B if and only if B is a complement to A (A ↔ B).

Equivalent Definition: If A is a complement to B, then the demand for A decreases as the price of B increases: ∂Da / ∂pb < 0.

Surprising Complementary Effects

Idea: Substitute goods can also exhibit complementary effects. Example: A price cut for Store A makes a shopping mall more attractive, which subsequently increases sales for Store B.

Classification of Complements

• Contribution of A alone to total utility: va = u(A) / u(A+B)
• Contribution of B alone to total

Assessing Growth Opportunities

Assessing growth opportunities includes planning new businesses, downsizing, and terminating older businesses. If there is a gap between future desired sales and projected sales, corporate management will need to develop or acquire new businesses to fill it.

The scope of strategic planning involves:

• Developing new business opportunities.
• Downsizing and eliminating older businesses.

The Strategic Planning Gap

This is a strategic planning gap for a major manufacturer of blank compact disks called Musicale (name disguised). The lowest curve projects the expected sales over the next five years from the current business portfolio. The highest describes desired sales over the same period. Evidently, the company wants to grow... Continue reading "Strategic Business Growth: Planning, Downsizing, and Corporate Culture" »

Job Production

This type of production makes a single, unique product from start to finish.

Advantages

• Unique, high-quality products are made.
• Workers are often more motivated and take pride in their work.

Disadvantages

• Very labor-intensive, so selling prices are usually higher.
• Production can take a long time and be expensive, for instance, if special materials or tools are required.
• Economies of scale are not possible, often resulting in a more expensive product.

Batch Production

In this type of production, products are made in batches. For example, a shoe factory could make different batches of shoes based on their size and color.

Advantages

• Since larger numbers are made, unit costs are lower.
• Offers customers variety and choice.
• Materials can be bought