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

Information Technology and Business Competitiveness

Reducing Transaction Costs and Brokerage

Inefficient markets require many intermediaries for transport, storage, collection, security, monitoring, and reporting. Computing and connectivity significantly improve market functions by facilitating:

• The instantaneous circulation of information on prices and product characteristics.
• The creation of more facilities to raise supply and demand.
• Inventory management and procurement.
• Rapid and safe transactions, among other things.

Electronic Commerce

Electronic commerce is a special instrument for the computerization of markets, with considerable growth potential and business opportunities across various industries.

Market Intelligence

Access to external market... Continue reading "IT Impact on Business: Lower Costs, Market Intelligence & Growth" »

Background of the Economic and Fiscal Regime of the Canary Islands (REF)

• 1507: First Royal Decree
• 1852: Port Franks
• 1972: Under a franchise and not the application of the Customs Revenue
• 1991: Adaptation to the EU Framework
• 1994: Current Economic and Fiscal Regime of the Canary Islands Act
• 2006: Renewal of the REF

What is Sought by the REF?

• Promoting the economic development of the Canary Islands
• Addressing the costs of remoteness:
  • Shortage of land and natural resources
  • Additional costs of supply and production
  • Difficulties in achieving economies of scale
  • Accommodation on the peninsula
  • Island market tightness

What is Intended by the Renewal of the REF?

• Improving the operation of the system
• Correcting inefficiencies
• Adapting to new regional aid guidelines for

International Trade: Core Justifications

The fundamental justification for international trade is to obtain goods and services not readily available or efficiently produced in the domestic country.

Factors Driving International Trade

• Production Costs: These depend on a country's endowment of factors of production (e.g., labor, capital, natural resources) and the technology utilized, significantly influencing prices.
• Demand: International trade is promoted by the diverse needs of a population. It is challenging for any single country to produce everything necessary to meet all its domestic demands.

Understanding Protectionism

Protectionism refers to a set of government actions aimed at restricting the entry of foreign products into a country, primarily... Continue reading "International Economics: Trade, Payments, and Forex" »

Types of Bank Deposits

Checking Account: A deposit account that allows for frequent transactions, typically used by individuals and businesses.

Savings Account: A deposit account designed for saving money, offering immediate availability of funds.

Term Deposits: Deposits held for a fixed term with a predetermined interest rate. The interest rate is typically higher than that of checking or savings accounts. Early withdrawal may be possible, but often without interest.

Functions of Money

Medium of Exchange: Used to buy goods and services.

Unit of Account: Provides a standard measure of value for all goods and services.

Store of Value: A way to store wealth, although its value can be eroded by inflation.

Demand for Money

People demand money for transactions... Continue reading "Banking and Finance: Deposits, Money, and the Spanish Financial System" »

Operational Accounting Fundamentals

Accounts: Information on each central patrimonial element. The account name and code should be placed on the left, with the debit (debe) on the left and the credit (haber) on the right. The account balance is the difference between the sum of amounts in the debit and credit columns.

Two types of accounts exist:

• Balance Sheet Accounts (Heritage Accounts): These record changes occurring in the elements that make up the company's balance sheet and show its financial situation at a given time (e.g., transport assets, stocks).
• Income Statement Accounts (Management Accounts): These record revenues collected and expenses generated as a result of the company's operations (e.g., purchases, wages, rentals, sales).

Company

Monopoly, Oligopoly, Cartels, Trusts, and Holdings

• Monopoly: A single company has complete control of a sector.
• Oligopoly: Stocks in each sector are controlled by a few large companies.
• Cartel: An agreement between companies to divide the market and artificially raise or maintain prices.
• Trust: A permanent merger of companies.
• Vertical Integration: A firm controls the entire production process.
• Dumping: Selling at a price below production costs temporarily to eliminate competition.
• Holding: Companies are controlled by the same bank.

New Production Systems

Taylorism: Scientific management of work based on the ideas of Frederick Taylor.

• Division of Labor: Each worker is assigned specific tasks in the production process.
• Tasks are timed to establish sanctions

Eight Principles of Security Policy Management

A) Security Policy and Leadership

Senior management establishes unity of purpose and direction through policies across various disciplines. Security policy must be led and upheld by top management to create an internal environment where everyone can contribute to achieving goals and objectives.

B) Customer Focus

Organizations depend on their customers and should understand their current and future needs, meet their requirements, and strive to exceed expectations. Customers include external clients, internal stakeholders, shareholders, and society in general.

C) Staff Participation

Staff at all levels are essential, and their full involvement enables their abilities to benefit the organization.

D) Process

Consumer Behavior: An Economic Perspective

The Roots of Consumer Behavior in Economic Thought

The study of consumer behavior emerged from the exploration of economic principles, particularly the concept of utility, or satisfaction derived from consumption. Early economists like Adam Smith and Jeremy Bentham were among the first to formally examine consumer behavior. They posited that consumers, acting as "economic men," make rational choices based on cost and value to maximize their satisfaction given limited time, energy, and money.

The Concept of Economic Man and Utility

Economic theory traditionally portrays humans as rational buyers, possessing complete market information and striving for the best possible outcomes in their purchasing decisions.... Continue reading "Consumer Behavior: Understanding the Economics of Choice" »

The structure organizing the work within a company directly impacts the perception that a worker can have of their working conditions and professional achievements. A highly vertical organizational structure with a long chain of command and control sections does not work well in the short term for teams. In contrast, horizontal structures best facilitate teamwork. The organizational structure influences the number of rules, procedures, paperwork, and other limitations that are encountered by workers in developing their work. There are six key elements considered in the organizational structure of an enterprise:

• Work specialization
• Bureaucracy
• Departmentalization
• Chain of command
• Centralization and decentralization
• Formalization

Entrepreneur Motivation

It... Continue reading "Key Elements of Organizational Structure & Employee Motivation" »