Understanding Economic Agents and the Circular Flow of Income
Item 3
Economic theory assumes that, in deciding, people are guided by the principle of economic rationality. Economic Rationality is to choose among the available choices, one that seeks more utility or welfare. Rent represents the value or the price paid for the use of something in a productive use of time. Depending on the productive resource that is generated, the income has different names: Salary if it is earned, the rental if it comes from natural resources, and interest if it stems from the
Read MoreUnderstanding the Economy: Resources, Systems, and Trends
The economy is concerned with the administration or use of existing resources to satisfy the needs of individuals and groups.
Economic Goods
Economic goods are produced to satisfy people’s needs.
Products are materials obtained directly from nature, such as wheat and fish, or manufactured goods like automobiles and clothing.
Tasks that provide services include transporting a person or group, healthcare, and business services.
Resources are limited and may run out. They are bought and sold.
Economic Activities
Read MoreConsumer and Producer Surplus, Utility, and Cost Concepts
Consumer and Producer Surplus
Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they pay. When the marginal benefit (MB) exceeds the marginal cost (MC), there is an under-allocation of resources. One of the key characteristics of private goods is rivalry, meaning that when one person buys and consumes a product, it is not available for another person. Increases in price reduce consumer surplus. Consumer surplus is always graphically represented
Read MoreJuscelino Kubitschek’s Plan: Brazil’s Industrialization 1955-1960
Period: 1955-1960
Plan Targets
- Five-Year Plan: Designed to accelerate industrialization.
- Government investment in infrastructure.
- Facilitate and promote private investment.
Targets
- Stimulate a 2% growth rate of income per capita.
- Control inflation at 13.5% per year.
- Achieve 6.2% annual revenue growth for non-coffee products.
- Reduce the import coefficient from 14% to 10%, replacing 30% of imports by 1962.
Priority Areas
- Energy
- Transportation
- Food
- Industry
- Education
Priority Sectors
- Energy
- Coal
- Oil
- Roads
- Steel
- Cement
- Automobile
- Meta-
Key Concepts in Finance: Trading, M&A, and Risk
Key Financial Trading Terms
- Spot Trade: An agreement to trade currencies based on the exchange rate today for settlement within two business days.
- Forward Trade: An agreement to exchange currency at some time in the future.
- APPP: PFC = S0 * PUS
- RPPP: E(S1) = S0 * [1 * (hFC – hUS)]
Mergers and Acquisitions (M&A)
- Merger: The complete absorption of one company by another, wherein the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity.
- Consolidation: A merger
Supply Chain Strategies: Product Life Cycles and Distribution
Supply Chain Strategies and Product Life Cycles
Assessing the Impact of Product Life Cycles on Supply Chain Strategy
To assess the effect of product life cycles on the appropriate supply chain strategy, we need to understand how the demand for a product and the importance of economies of scale change over the life cycle of the product. A typical product life cycle has several stages:
New Product Introduction: The Case of a New Car Design
Consider a new car design. Initially, the car is introduced with