Economics, Strategy, and Globalization Flashcards
Economics, Strategy, and Globalization
Explain the relationship between the marginal propensity to save and the marginal propensity to consume.
Economics, Strategy, and Globalization
Marginal propensity to consume + marginal propensity to save = 1
Economics, Strategy, and Globalization
Marginal propensity to Consume formula
Economics, Strategy, and Globalization
Marginal Propensity to Consume = 1 - Marginal propensity to save
Economics, Strategy, and Globalization
Marginal Propensity to Save formula
Economics, Strategy, and Globalization
Marginal Propensity to Save formula= (1 / Multiplier)
Economics, Strategy, and Globalization
Define Marginal Revenue Product
Economics, Strategy, and Globalization
Marginal Revenue Product- the increase in total revenue received by the addition of one worker.
Economics, Strategy, and Globalization
Elasticity of Demand Formula
Economics, Strategy, and Globalization
Elasticity of Demand = ( % of change in quantity demanded / % if change in price)
Economics, Strategy, and Globalization
Elasticity of Demand Quotient formulas
Economics, Strategy, and Globalization
Elasticity of Demand Quotient formulas
Quotient > 1 = Price elastic
Quotient
Economics, Strategy, and Globalization
Define Total Aggregate Demand
Economics, Strategy, and Globalization
Total Aggregate Demand = (Civilian expenditures + investments) + (Government expenditures + investments)
Economics, Strategy, and Globalization
Show how to calculate a price index for the year 2013, using the year 2008 as a base period.
Economics, Strategy, and Globalization
Price of 2013 market basket in 2013
____________________________ x 100
Price of 2013 market basket in 2008
Economics, Strategy, and Globalization
Explain Porters Model for Industry Analysis (5 forces)
Economics, Strategy, and Globalization
Explain Porters Model for Industry Analysis (5 forces)
1) Threat of new entrants
2) Bargaining power of customers
3) Bargaining power of suppliers
4) Threat of substitute products or services
5) Rivalry of the firms in the market
Economics, Strategy, and Globalization
Describe a forward
Economics, Strategy, and Globalization
Forward- A negotiated contract to purchase a specific quantity of a commodity at a fixed price.
Economics, Strategy, and Globalization
Describe a future
Economics, Strategy, and Globalization
Future- A standardized contract to take delivery of a commodity at a future date and at a specified price
Economics, Strategy, and Globalization
Describe the types of unemployment
Economics, Strategy, and Globalization
Types of unemployment
Frictional- measure of temporary employment when workers change jobs or new workers enter workforce.
Structural- unemployed due to a mismatch in job skills.
Cyclical- unemployment due to economic conditions.
Overall- Unemployed for all reasons.
Economics, Strategy, and Globalization
Describe the Arc Method
Economics, Strategy, and Globalization
Arc Method
% change in quantity ((Q2-Q1) / ((Q2+Q1) / 2))
________________ = __________________
% change in price ((P2-P1) / ((P2+P1) / 2))
Economics, Strategy, and Globalization
Calculate FWD Premium/ Discount
Economics, Strategy, and Globalization
Prem or Disc= Fwd rate- Spot rate Months (days) in yr
_______________ X ______________
Spot Rate Mnth (day) in fwd pd
Economics, Strategy, and Globalization
Define Economic Cost
Economic cost is the total cost of all resources used to produce a good or service
