Principles of Microeconomics: Chapters 6, 10, 11, 14, 15 & 16 Summary
Chapter 10: Public Goods, Common Resources, and Merit Goods
Common Resources
Common resources are rival but not excludable. People tend to use common resources excessively. Governments try to limit their use.
Merit Goods
Merit goods are provided by the public sector but are either over or under consumed.
Chapter 11: Externalities
When one party’s actions affect another, it’s called an externality.
Negative Externalities
Negative externalities cause the socially optimal quantity in a market to be less than
Read MoreCurrent Assets and Bank Reconciliation
Current Assets:
Current Assets include Cash, banks and temporary investments, clients, petty cash, and inventory.
Bank Reconciliation
1. When the bank balance does not match the company’s balance:
a. Deposits in transit: These are deposits that were made after the cutoff date of the statement or that are not yet reflected by the bank due to processing time.
b. Checks receivable: These are checks received by the company that have not yet been cleared by the bank.
c. Bank errors: These include charges or
Read MoreMacroeconomics Principles
Measuring a Nation’s Income
Microeconomics
The study of how individual households and firms make decisions and how they interact with one another in markets.
Macroeconomics
The study of the economy as a whole. Its goal is to explain the economic changes that affect many households, firms, and markets at once. It answers questions like:
- What determines the average income?
- Why do some prices rise rapidly in some time periods?
- Why do production and employment expand?
Gross Domestic Product (GDP)
A measure of
Read MoreUnderstanding Entrepreneurship: A Guide to Innovation and Business
What is Entrepreneurship?
Entrepreneurship is a way of understanding the world – a positive way to deal with the uncertainty of tomorrow. Entrepreneurs are, essentially, innovative people, able to adapt to changes and take advantage of them. The entrepreneurial spirit is wanting to build capacity for change, experiment with your own ideas, and respond with greater openness and flexibility to current and future challenges.
Origins of the Term Entrepreneur
Since its inception, the term “entrepreneur”
Read MoreUnderstanding Business Size and Growth: A Comprehensive Guide
Business Studies: Understanding Business Size and Growth
1. Importance of Measuring Business Size
Understanding business size is crucial for various stakeholders:
- Investors: Helps in making informed investment decisions.
- Government: Assists in determining appropriate tax rates and policies.
- Competitors: Allows for benchmarking and strategic planning.
- Workers: Provides insights into the potential work environment and opportunities.
- Banks: Enables assessment of loan risks and financial stability.
2. Methods
Read MoreMicro-Enterprise Project Viability and Market Research
Micro-Enterprise Project Development
The Business Idea
All micro-enterprise projects are developed around an idea that arises from the arrest of a business opportunity. This idea arises in the mind of a person or group of people, influenced by conditioning factors such as:
- Discovery of an innovative product or service with perceived market demand.
- Purchase of specific know-how.
- Repetition of existing ideas (a reflection effect).
- Availability of a particular technical resource.
- Knowledge of unmet market