Business Environments and Resources: A Comprehensive Guide
Business Environments
Definition of Environment
The external forces or institutions that can potentially affect a firm’s performance are known as its environment.
The Company
A company is a system that interacts with and depends on its specific environment (customers, competitors, suppliers) and its general environment (social, economic, political, religious).
A company’s success depends on appropriate and successful interactions with each element of its environment. Therefore, it’s crucial to understand
Read MoreUnderstanding Wealth Tax: A Comprehensive Guide
Introduction
What is Wealth?
Wealth is one of the three manifestations of the ability to pay, alongside income and consumption.
Justification for Wealth Tax
This duty is arguably justified by the following reasons:
It helps to correct some problems of income tax (e.g., unrealized capital gains).
Increased wealth leads to a higher tax liability.
It reduces the concentration of wealth, which is both socially and politically desirable.
Taxes on wealth are paid on benefits that wealth holders have received
True or False Economics Questions: Test Your Knowledge
Economics True or False Quiz
Test Your Understanding
1. Economic problems arise solely due to constantly rising prices of goods and services.
False. Economic problems can also arise from scarcity, which occurs when resources are limited relative to wants and needs.
2. According to the law of demand, if the price of a good rises, its quantity demanded falls. Therefore, if the price remains constant, demand should not vary.
False. Demand can vary even if the price remains constant if other factors influencing
Read MoreUnderstanding Economic Indicators and Fluctuations
Consumer Price Index (CPI) and GDP Deflator
The Consumer Price Index (CPI) measures the average change in prices paid by urban consumers for a basket of consumer goods and services. However, it’s an imperfect measure of the cost of living because it doesn’t account for consumer substitutions to cheaper goods, increased purchasing power from new goods, or unmeasured quality changes. Consequently, the CPI tends to overstate true inflation.
The GDP deflator is another measure of the general price level.
Read MoreLow Price and Product Competition: A Theoretical Guide
Low Price and Product Competition
Theoretical Support Guide #8
We analyzed the theories of supply and demand separately, establishing the origin and assumptions about demand and supply curves. Now, we use a model under perfect competition to see how it determines product price and quantity within a given market period, both short-term and long-term.
Definition of Perfect Competition
A market is perfectly competitive if:
- A large number of buyers and sellers exist, each too small to affect the product
Economics: Supply, Demand, and Market Analysis
Summary of Mochón and Becker
Unit 1: Economics as Science
Chapter 1: The Objective of Economics
Economics studies how societies manage scarce resources to produce and distribute goods and services among individuals, fulfilling human needs and desires.
Types of Goods
- Free goods: Unlimited and not owned.
- Economic goods: Scarce in relation to desires.
Depending on their nature:
- Capital goods: Used to produce other goods.
- Consumer goods: For direct satisfaction of needs.
- Durable: Extended use.
- Non-durable: Affected