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

Microeconomics: Key Concepts and Principles

Ceteris Paribus Clause

The ceteris paribus clause, when used in the context of the role of offer, does not include changes in the income of consumers.

Law of Diminishing Returns

In the context of the law of diminishing returns, the technical maximum coincides with the maximum total return.

Isocost

The slope of the isocost reflects the relative price of the two factors.

Homogeneity of Demand Functions

The fact that demand functions are homogeneous of degree zero in prices and incomes implies that changes in prices and income, in the same proportion, do not alter consumer demand.

Labor Supply Curve

When the labor supply curve bends backward, it indicates that from a certain wage level, further increases reduce... Continue reading "Essential Microeconomic Theories and Applications" »

The Dynamic Nature of Marketing

Marketing is a social process that depends on time, place, and the technological, economic, and political framework. A successful marketing strategy must evolve over time, as no competitive position is permanent.

Marketing's Historical Evolution

• Until the 1940s: Production Focus

  Demand exceeded supply, leading to a primary focus on production.

• 1940s-1960s: Traditional Marketing Emerges

  Traditional marketing was born to address the surplus of production, as supply began to exceed demand.

• Until the 1990s: Consumer Needs Focus

  The emphasis shifted to understanding and meeting consumer needs. This era saw the rise of strategic marketing, market research, and modern marketing theories.

• Today: The Consumer as a Market

  The consumer

Financing Your Company

Obtaining the necessary funds is crucial for the optimal functioning of a company.

Types of Financing

Self-Financing

• Capital contributed by partners
• Reserves and undistributed profits (self-financing):
  • From enrichment: Legal Reserve, Statutory Reserve, and Voluntary Reserve
  • Maintenance: Depreciation and provisions

External Financing

• Based on Term:
  1. Short Term: Commercial loans, factoring, discounting of bills, financial credits, and bank loans.
  2. Long Term: Loans, leasing, renting, loans for fixed assets, bonds or obligations.
• Based on Origin:
  1. Internal Funding: Reserves or undistributed assets.
  2. External Funding: Other sources.
• Other External Funding:
  1. Grants and aid: Economic quantities that governments provide to entrepreneurs who meet

Production: Definition and Objectives

Production is the process by which certain significant items, work, machines, working people, or knowledge are transformed into consumer products, goods, or services.

Production Goals

• Ensure that delivered products or provided services are requested, both in the amounts and on the dates agreed upon with the customer.
• Ensure that these products or services are manufactured or provided within the expected costs, and that these costs are minimal, for greater profit.

Description of Output

This is to determine in detail the procedure to be followed and the means employed to produce the products or services.

Stages of the description of the production:

• Define the parameters of the production process
• Determine the necessary

Recording and Accounting for Stock of Transactions of Goods

Accounting for Stock in the PGC

The System of Accounting Records and Accounts of the PGC Identification

300 -> Goes Active

600 -> Shopping

700 -> Sales

There are 2 sets of recording the goods:

1. Administrative Procedure: Only the account becomes 300.

(300) to (400) BUY

(430) to (300)

(700) SALES

2. Procedure Speculative:

(600) to (400) BUY

(430) to (700) SALES

You can do both methods but speculative is recommended. We distinguish two phases:

• During the year: The balance of the 300 reflects the opening balance.
• End of the year: An adjustment is made. There are 2 ways:
  • Balance goes to 600/700 129.
  • Inventory mirror 300. This is carried through the book store.

Create Accounts and Sub-Stock

The General... Continue reading "Recording & Accounting for Stock Transactions of Goods" »

Stock Market Efficiency

A stock market is considered efficient when the information available within it is identical for all investors, and when prices over time are independent. This means that in an efficient market, current and future prices have no direct correlation with past prices. Therefore, historical price series are not indicative of future price behavior and cannot be reliably used to predict price movements.

When new information emerges that could influence the intrinsic value of a security or securities, an efficient market reflects this new information immediately. It is possible that from the moment news is rumored until it becomes public, more experienced investors might use it to their advantage, even if the information eventually... Continue reading "Stock Market Efficiency: Understanding Price Behavior" »

Keynesian Response to Economic Crisis

In response to those who insisted on a downward adjustment of wages to increase production, Keynes argued this approach was flawed. He believed that recovery would not occur without government action.

The Role of Government Spending

Keynes argued that the main problem of the economy was the lack of demand stemming from declining investment. He proposed that the state increase spending on activities that employ many workers.

This would generate a deficit, but Keynes argued this was not a problem because increased demand would stimulate the economy. The initial spending, transformed into wages and goods, would create new demand in other sectors (the Keynesian multiplier).

The Keynesian Multiplier

Through the expansion... Continue reading "Keynesian Thought and Roosevelt's New Deal" »

Understanding E-commerce: Definition and Scope

Electronic commerce, commonly known as e-commerce, consists of the purchase and sale of products or services through electronic media, such as the Internet. It also encompasses a wide range of activities including promotion and publicity, product and service marketing, corporate image building, integral marketing strategies, facilitation of contacts between trading parties, post-sales support, market monitoring and research, and support for electronic business sharing.

E-commerce for Businesses: A Strategic Channel

For a company, e-commerce serves as a vital commercial channel and a means for information provision. It enables businesses to identify potential customers and significantly improve communication... Continue reading "Understanding E-commerce: Evolution, Trends, and Impact" »

Countercyclical Policy

Fiscal or monetary policy designed to mitigate the intensity of the economic cycle, contributing to the stability of output and employment.

Absolute Price

The price of a good, service, activity, or service factor in terms of monetary units.

Real Price

The price of goods, services, activities, or services in relation to a factor, an index that has a basket of goods and services, such as the CPI.

On Price

Price expressing the ratio of exchange of goods, a service, or an asset factor in terms of another good.

Projection

Estimating the value a variable will have in the future, based on informal procedures or formal models, conditional on available information.

Basis Points (bp)

A hundredth of a percentage point. Example: an increase... Continue reading "Understanding Key Economic and Financial Terms" »

Definitions:

• Transport: The transfer of people and goods from one place to another.
• Shopping Center: This is a large complex which includes small specialty shops.
• Import: Purchase of goods and services that a country performs abroad.
• Ecotourism: Focuses on the knowledge of nature and the ecological value of protected areas.
• Balance of Payments: Reflects all economic transactions by a country with the rest of the world during a period of time.
• Charter Flight: A flight booked by a tour operator to transport passengers to a holiday destination, when passenger demand requires it.

Two Types of Internal Trade:

• Wholesale: The company conducts a business that purchases goods in bulk directly from producers for resale to retailers.
• Retail: The retail business