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

ITEM 6 — Branding and Packaging

1. Brand: A brand is a name, term, symbol, or combination of these elements, protected by law, that differentiates a company's products from the competition.

2. Brand strategy:

• Brand-only (single brand): Product-market similar; same level. Resources (including money) can use the same distribution channels.
  • Advantages: Facilitates the introduction of new products and reduces advertising and promotion costs.
  • Disadvantages: It applies only to a single product unit.
• Brand strategy (opposite approach): The opposite of the previous strategy (individual or separate branding for each product).
  • Advantages: A negative result for one product does not affect other products of the company.
  • Disadvantages: Additional costs are

Production and Economic Structures

Economic Phenomena: A set of phenomena related to production. This encompasses the sum of the output of all production units, creating value added throughout the economy. It's crucial for understanding the overall economic structure and short-term cycles.

Business Management: One type of business management focuses on formulating and implementing strategies. This involves making contingent decisions and considering various factors, such as access to financial resources, fixed capital, and renewal investment. Financial returns and recovery time are key considerations.

Productivity and Efficiency: Output per unit of employee input is a vital metric. Intensive operations management is essential for achieving... Continue reading "Business Management and Strategic Decision-Making" »

Understanding Value Added and Production Technologies

Value added is the extra utility that production brings to items, giving more value to things than they had before being subjected to this process.

Production Technologies: This refers to the set of processes, production equipment, and machinery where, through the proper factors of time, material, human, and organizational resources, a good or service is performed.

Perspectives on Production

• Economic Perspective: The purpose of production is the circular flow within the line.
• Utilitarian Perspective: Indicates the function that the production serves.
• Technical Perspective: Focuses on how the production is carried out as described.

Economic Efficiency and Cost Structures

Economic efficiency involves... Continue reading "Business Production Economics and Organizational Structure" »

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" »

Taxation Fundamentals

Direct vs. Indirect Taxes

Direct taxes are recorded directly on the income of an identifiable individual or entity. Income tax applies here, where the individual pays taxes based on their income and function.

Indirect taxes are collected by a person who ultimately supports the tax burden, and they are associated with consumption. The consumer pays indirectly for products because the tax (including VAT) is included in the final price.

Personal Income Tax (PIT)

Personal Income Tax (PIT) is a direct and progressive tax, calculated directly on the income of a person or company. Revenue sources recorded include:

• Wages: Income obtained by workers.
• Dividends: Profits distributed to corporate owners.
• Investment Income Yields: Interest

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: