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

Understanding Economic Principles: Demand, Production, and Costs

The Concept of Demand

Individual Demand Curve

The individual demand curve represents the quantity of a good that consumers want to purchase at various prices.

Variables Affecting Demand

• Price of the good: The most direct influence.
• Consumer income: Affects purchasing power.
• Prices of other goods: Relates to substitutes and complements.
• Tastes and preferences: Subjective consumer desires.

Demand Function

The demand function specifies, for each possible price of a good, the quantity demanded by the consumer.

Effects on Demand

• Substitution Effect: Occurs when consumers switch to a relatively cheaper substitute due to a price change. (e.g., choosing dental floss over a toothbrush if the toothbrush

Defining Your Business Strategy and Market Position

This involves answering a fundamental question: to achieve our financial objectives, how are we perceived by our customers?

However, we must not only answer this general question but also determine which markets we will enter, who our target customers are, and how we will compete. Resolving these questions requires reflection on the following aspects:

• What are our target segments?
• What value proposition do our target segments prefer?
• What is our current value proposition, and how should we change it?
• What are our sales objectives?
• How do we achieve these goals?

Understanding the Value Proposition

“The value proposition defines the firm's strategy for the client, describing the unique combination

Labor Relations

Labor relations involve the company's interactions with employee representatives, which can include:

• Company Committee: In companies with over 50 employees.
• Staff Officer: Up to 3 in companies with between 10 and 50 employees.
• Representatives: Unions are associations of workers created to defend their common interests. All workers have the freedom of association.

The company and employee representatives collaborate on collective labor conditions, negotiate collective agreements, and seek solutions to conflicts. A collective agreement is a contract negotiated and concluded by representatives of workers and employers, regulating working conditions in a specific geographic area and activity.

If the company and employees disagree on an... Continue reading "Understanding Labor Relations, ICT, and Stock Management" »

Foundations of Economic Development

Productivity Enhancements

Productivity is the quantity of goods and services that each unit of productive factor can generate. If it grows, it increases the country's production. It depends on productive capital, human capital, natural resources, and technological expertise.

Savings and Investment

Encouraging savings allows a portion of income to be invested, accelerating economic growth. If domestic savings are not generated, foreign investment can be utilized.

Education and Training

Investment in human capital produces positive synergies. Human capital is considered a decisive factor in raising productivity and fostering economic growth.

Free Trade

Removing trade barriers improves the possibility of free trade... Continue reading "Economic Development Factors and Underdevelopment Traits" »

Expansion of the Crisis (1959-1975)

Economic Expansion (1959-1973)

The timid recovery in the fifties was quite worrying. It could have been without oil for lack of money. In 1957, the government incorporated technical experts in economics (technocrats) linked to the Opus Dei religious institution. The most prominent were Rubio (Minister of Finance) and Ullastres (Minister of Commerce), who prepared the Stabilization and Liberalization Plan of 1959.
Spain won the aid of the IMF and OEEC. The stabilization plan consisted of modifying autarky and establishing the foundations for the Spanish economy to progressively convert into a classic capitalist system. The economic situation as a result of applying autarky was absolutely disastrous, and

Enterprise and Environment

The company is the central and most important institution of the economic machinery of our society. As such, it requires objectives (e.g., maximizing profit at minimum cost), functions (financial, production, and commercial), and an appropriate organizational structure.

Business Location Factors

• Market Demand: Examine whether the area has interest in the product being offered and investigate the competitive situation.
• Communications and Transport: Consider the available means of transport and whether the location is easily accessible to other companies and customers.
• Labor Market: Check the availability of necessary manpower, whether specialized or not.
• Supply of Raw Materials: Assess the quality, cost, and availability

Banking Financial Intermediaries in Spain

Banks, thrifts, and credit unions constitute the Spanish banking system. These entities are financial intermediaries. The primary differences between them lie in their legal structure:

• Banks: Private companies aiming to generate profits for their owners.
• Savings Banks: Non-profit entities allocating profits to charitable and social causes.
• Credit Unions: Members are depositors who benefit from their financial services.

Regarding services, the typical activities of these banking intermediaries are very similar: deposit-taking and lending.

Market Failures

1. Cycles: The market is criticized for failing to ensure stable economic growth.
2. Externalities: Many economic activities generate external effects on society

The Role of the Company

The company is the basic economic unit in the face of production and is responsible for producing and publicly holding most goods and services.

The Employer's Evolving Role

The traditional employer is the person providing the capital and, at the same time, performing the functions of management. In companies, the entrepreneur-manager assumes the risk, and many times, is the founder.

As large companies emerge, there is a separation between the classical functions of the employer. On one side is the figure of the investor, who assumes the risks linked to the promotion and innovation by providing capital. On the other, it strengthens the role of the professional director, specializing in management and business administration.... Continue reading "Understanding Business Production and Efficiency" »

The summation of losses from workplace incidents is verified by taking into account the damage to the physical and mental integrity of the worker, the losses incurred by the company, and other costs accruing to society.

Impact on Workers

Statistics show a significant number of workers prematurely deceased or unable to work due to accidents. Those who survive are affected by damage that manifests itself in:

• Physical and mental suffering
• Need for surgeries and remedies
• Unemployment and marginalization
• Helplessness for the family

Direct and Indirect Costs of Accidents

The total cost of an accident is the sum of two parts: the direct cost (or insured cost) and the indirect cost (or uninsured cost).

The direct cost typically refers to monthly Social Security... Continue reading "Minimizing Workplace Accident Costs Through Effective Risk Management" »

Types of Business Concentration

Based on Production Phases

Horizontal Merger

Occurs when companies within the same sector or performing the same processing or manufacturing stage combine.

Vertical Concentration

Involves the grouping of companies engaged in different phases of the production process, increasing industry supply through complementary products.

Conglomerate Merger

Characterized by multi-sectoral diversification.

Cartel

A formal agreement between firms to reduce or eliminate market competition, often controlling production and distribution.

Trust

The union of different businesses under central management to control product sales and marketing.

Holding Company

Controls other companies' activities through ownership of their shares.

Characteristics