Production, Costs, and Returns: Key Economic Concepts
Key Economic Concepts
Target Company: Beneficio. Maximizing benefits and minimizing costs can be expressed as absolute magnitudes, indicating economic costs and benefits in simple monetary units. Relative magnitudes are indicated in percentage terms, often more effective for comparing costs with other quantities, such as price.
Cost
The price of inputs or factors of production necessary to obtain average production outputs or physical units.
Benefit
The benefit an employer gets from the production and
Macroeconomic Equilibrium, Unemployment, and Fiscal Policy
Macroeconomic Equilibrium and Price Levels
2 – What is macroeconomic balance? What happens if the price level is higher than the balance?
The macroeconomic balance, where real GDP and the general price level meet the demands of buyers and sellers, occurs at the intersection of the aggregate supply and demand curves, point E.
Frictional Unemployment: Classical vs. Keynesian Views
3 – Is there a single explanation for frictional unemployment? Explain the causes according to Classical and Keynesian economists.
Read MoreInternational Trade Theories: Absolute, Comparative Advantage & Product Life Cycle
International Trade Theories
1. Absolute Advantage Theory: If there were no trade barriers, each country would specialize in products where they have an absolute advantage. This specialization, driven by economies of scale, would lower costs and increase overall welfare through trade.
2. Comparative Advantage Theory: This theory suggests that each country should specialize in producing goods where they have a greater comparative advantage. This leads to efficient production for both domestic consumption
Read MorePersonal Income Tax (PIT) Return: Family, Income, and Investments
Personal Income Tax (PIT) Return Options
- If we are talking about the same family, they have two options when filing a PIT return:
- Joint Declaration:
- They file together or individually; one family member cannot be excluded.
- Income of all members is included.
- If earnings are > 8000€/year, an individual cannot be considered to determine the personal minimum.
- Individual Declaration:
- Everyone files individually, including all their income.
- If earnings…
- Parents’ children could be included in parents’
- Joint Declaration:
Understanding Market Structures: From Perfect to Imperfect Competition
Industry
Industry applies to all individual production units and companies grouped in the development of a single good or service.
Deadlines
Short term: A period of time long enough for production changes that have no modifications made in the size of companies.
Long term: A period of time long enough to produce changes in production levels by altering the size of the industry.
Costs
Cost: The expenditure incurred to produce a given amount over a period of time.
Fixed costs: These are produced independently
Read MoreUnderstanding Money Supply, Central Banks, and Monetary Policy
What is Money?
- Medium of Exchange: It is acceptable by all for transaction purposes.
- Store of Value: It can be held for future purchases.
- Standard of Value: It serves as a yardstick for measuring the prices of goods.
What is Money Supply?
- M1 (Narrow Money): Includes currency held by the public (non-bank) plus balances in transaction accounts.
- M2 (Broader Money): M1 plus balances in savings accounts and money market mutual funds.
Required Reserves Ratio
It is the portion of the deposits that commercial banks
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