Key Concepts in Economics: Production, Costs, Revenue, and Market Structures
Key Economic Concepts: Production, Costs, and Revenue
Production Timeframes
- Short Run: A period where at least one factor of production is fixed. All production occurs in the short run. The length is determined by the time needed to increase the quantity of the fixed factor.
- Long Run: A period where all factors of production are variable, but technology is fixed. All planning occurs in the long run.
Production Metrics
- Total Product: Total output a firm produces in a given period.
- Average Product: Output
Corporate Finance: Structure, Cycles, and Funding
The Economic and Financial Structure of a Company
For a company to function, it needs to manage a number of assets (inventory, cash, raw materials, etc.). This constitutes its assets and defines the economic structure of the company. To acquire these assets, the company requires funding. The origin of these funds is its liabilities and defines the company’s financial structure.
The Financial Area of a Company
Objective:
- Design the most appropriate financial structure.
- Determine the extent to which candidates
Fundamental Accounting Principles and Standards
Fundamental Accounting Principles
Accounting, as a science, interprets the economic facts of a business. It organizes these facts into accounts for control and presentation. Accounting rests on principles that form its foundation. These principles have been defined based on the experience of the accounting profession and the constant quest for improvement in interpreting economic events in the business world.
1. Equity
Equity between competing interests must be a constant concern in accounting. Users
Read MoreAccommodation Types: Hotels, Self-Catering, and More
Classification of Accommodation
Accommodation is normally classified into:
- Self-Catering Accommodation:
- Guests prepare their meals; no food services are provided.
- Serviced Accommodation:
- Meals and other services are provided.
Classifications depend on:
- Service Quality: Level of staff professionalism and attentiveness.
- Facilities: Equipment and amenities provided.
Types of Serviced Accommodation
- World-Class Service Hotels:
- Used by wealthy and famous tourists, offer high quality, personalized services with dedicated
Offshoring, Taxation, Business Management, and Legal Frameworks
Offshoring
Offshoring: The global trend has led to employment having recourse to it. This is not a new phenomenon, but it is already widespread. It is the act of transferring production from industrialized countries to developing countries characterized by having levels below their per capita income and wages of half the population, with the sole purpose of minimizing costs. By minimizing costs, employers manage to produce at a cheaper price than the competition and be competitive, and may sell at
Read MoreMacroeconomics: Understanding Economic Activity and GDP
Macroeconomics: Understanding the Economy as a Whole
Macroeconomics concerns the study of the functioning of the economy as a whole. Its purpose is to obtain a simplified view of the economy, but at the same time, it allows us to understand and act on the level of economic activity in a given country. The fundamental objectives of macroeconomics are growth, employment, and price stability.
Monetary Policy Tools
Monetary policy tries to stabilize economic activity and prevent or at least offset the
Read More