Xnephon

Plato

Aristotle

Hesiod

a social science about creating value to accumulate wealth

Economics is defined primarily as the study of how to maximize profits for businesses regardless of resource limitations.

Economics is defined primarily as a branch of mathematics that focuses on financial formulas and accounting rules.

Economics is defined primarily as the science of predicting market prices with complete accuracy.

the system of production, distribution, exchange, and consumption within a country

the financial activity of international corporations only

the global exchange of goods between countries

the study of personal income and expenses

Macroeconomics

International economics

Microeconomics

Political economy

Production

Distribution

Consumption

Climate conditions

Households

Firms

Government

Natural disasters

Regions and districts

Domestic and foreign sectors

Goods and services

Rich and poor industries

Ownership forms

Sector specialization

Geographical distribution of economic activity

Income distribution

Increase state control

Accumulate gold reserves

Satisfy the needs of society

Eliminate competition

Safety → Esteem → Physiological → Self-actualization

Physiological → Love → Safety → Esteem

Physiological → Safety → Love/Belonging → Esteem → Self-actualization

Esteem → Safety → Love → Physiological

Total wealth of a country

Total exports of a country

Market value of all final goods and services produced within a country in a given period

Total income of households

Goods bought from abroad

Services used inside a country

Goods and services sold to other countries

Foreign investment inflows

GDP + inflation

Exports – Imports

$$X + M$$

Domestic trade volume

Imports – Exports

Exports + Imports

$$X - M$$

GDP – consumption

GDP / population

Imports / GDP

$$X / GDP$$

Net exports / inflation

Free trade without state intervention

Focus on consumer welfare

Economic theory emphasizing exports and accumulation of gold through state control

Theory of comparative advantage

Producing everything cheaper than others

Absolute productivity leadership

Ability to produce a good at lower opportunity cost

Exporting more than importing

Preferential trade arrangement

Customs union (CU)

Economic union

Common market

Preferential trade arrangement

Free trade area

Customs union

Common market (CM)

A basic primary economic unit aimed at creating through production

A non-profit charity only

A government ministry

A pure financial intermediary

HR, IT, Legal, Compliance

Logistic, Taxation, Auditing, R&D

Marketing, Production/Operations, Finance, Organization

Design, Leasing, Lobbying

A high quality of output

Maximizing inventory

Eliminating competition

Reducing number of employees

Income - Cost

Revenue + Cost

Assets - Liabilities

Price * Quantity - Taxes

sales revenue plus fines, compensations and internal income

only net profit

only proceeds from services

wages and salaries

$$Q \times P$$

p - Q

$$Q/p$$

p - costs

Fixed costs don’t change with output in the short run: variable costs change with output

Fixed costs change with output: variable cost stay constant

Both fixed and variable costs never change

Variable cost are sunk costs

$$TP/LF$$

$$LF/TP$$

$$\Delta Q / \Delta L$$

$$Q \times L$$

a money amount paid: real wage is its purchasing power

wage adjust for inflation only

wage in units of output

a fixed living wage

Differential rent areas from fertility/location difference: absolute rent is paid from all plots

only absolute rent exists

rent equals profit

differential rent depends only on taxes

GDP = 120*4 + 150*2 = 780

GDP= 120*2 + 150*4

GDP= 270

GDP=880

$$GDP=80*5+60*7=820$$

$$GDP=80*7+60*5$$

$$GDP=140$$

$$GDP=920$$

$$GDP=200*3+140*4=1160$$

$$GDP=200*4+140*3$$

$$GDP=340$$

$$GDP=1260$$

$$GDP=50*10+300*1=800$$

$$GDP=50*1+300*10$$

$$GDP=350$$

$$GDP=900$$

$$GDP=90*6+110*4=980$$

$$GDP=90*4+110*6$$

$$GDP=200$$

$$GDP=1080$$

8%

10%

12%

6%

105

110

115

120

4%

5%

6%

10%

FTT = 150, NE = 10

FTT = 10, NE = 150

FTT = 80, NE = 70

0,1

0,2

0,5

5

10%

15%

20%

25%

20%

67%

200%

180%

$18,000

$1,215

$16,800

$15,000

sales + fines + compensations + interest

only profit

wages + rent + taxes

depreciation only

650

6500

750

500

dog

cash cow

star

Market penetration

Product development

Market development

Diversification

Single observation

Continuous research

Experiment

Simulation modeling

Strengths

Weaknesses

Opportunities

Threats

Macro-environment

Micro-environment

a set of enterprises extracting raw materials and producing/processing goods and energy

only agriculture

only services

a financial sector

mining, oil and gas

textiles and apparel

software publishing

education

transform materials into goods and include repair/installation of equipment

extract ore

teach students

issue regulations

raising productivity and enabling technological change across sectors

only reducing employment

printing money

eliminating services

Computer programming

Web portals

Agricultural tillage

Data processing and hosting

Land, Labor, Capital, Entrepreneurship, Knowledge

Land, Labor only

Money printing

Only natural resources

Land—Rent; Labor—Wage; Capital—Income; Entrepreneurship—Normal profit; Knowledge—Intellectual rent

Land—Wage; Labor—Rent; Capital—Profit only; Knowledge—Tax

All factors—Wage

Capital—Rent only

both the main factor and the goal of production

irrelevant in modern times

replaced entirely by capital

only consumers

Labor, Capital, Land

Labor and Technology only

Only Capital

Entrepreneurship only

Labor, Capital, plus Technology

only Government spending

at least one input fixed and one variable

all inputs variable

all inputs fixed

no production

$$\Delta Q/\Delta X$$

$$Q/X$$

$$Q\times X$$

$$\Delta X/\Delta Q$$

$$Q/X$$

$$\Delta Q/\Delta X$$

$$Q-X$$

$$X/Q$$

adding more of a variable input to a fixed input eventually reduces marginal product

average product always rises

marginal product is constant

fixed input adjusts immediately

AP is decreasing and MP is positive until MP becomes zero

$$MP>AP$$ and AP rising

MP negative

AP increasing

all inputs are variable and firms can choose the most efficient combination

capital is fixed

labor is fixed

technology is fixed

combinations of K and L yielding the same output

cost combinations yielding same cost

price-quantity pairs

utility levels

$$MPL/MPK=-\Delta K/\Delta L$$ along an isoquant

$$MPK/MPL$$

$$\Delta L/\Delta K$$

$$-PL/pK$$

combinations of inputs costing the same total amount

combinations with same output

profit levels

Total revenue equals total cost

Average cost equals marginal cost

Price equals marginal cost

Variable cost equals fixed cost

by product, region, or customer

by functions only

by projects only

by random teams

combines functional and project lines of authority

has only one boss per employee

eliminates cross-functional work

is identical to divisional

custom, single or prototype items

very large standardized volumes

continuous chemical processing only

call centers

making groups of similar items through stages

single bespoke production

unrelated to scheduling

only service operations

large amounts of standardized products, often on assembly lines

always bespoke

only for software

random artisan work

waste reduction and timely supply

higher inventories

long queues

ignoring quality

at end of the line; TQM engages quality at each stage

only suppliers

only managers

only final consumers

technological, subject, and mixed

functional only

regional only

financial only

an integral component of the production process for a specific operation

a social club

only an office

a marketing channel

size of links, centralization degree, ratio of main/aux/serving, proportionality, specialization level

only profit

only headcount

only area of buildings

10

15

30

5

10

20

5

200

end of Stage II

Stage I

Stage III

long run

2

0.5

−2

−0.5

L=5, K=10

L=10, K=10

L=0, K=10

L=5, K=5

50

67

100

200

1000

-1000

4000

3000

400

200

600

300

65%

75%

80%

90%

20

8

41

5

8,400$

12,400$

13,400$

16,400$

16$

18$

19.14$

20$

15.24

16.00

18.00

20.00

waste reduction and flow

fixed cost level

tax rate

nominal wages

Job production

Batch production

Flow production

Lean only

Functional

Matrix

Divisional by region

Simple

Job production

Batch production

Flow production

Project production

TQM and lean principles

Only final inspection

Chrematistics

Only HR policy

Stage I

Stage II

Stage III

Long run

It will break even at 4,167 units

Break-even is 2,778 units

Break-even is 5,000 units

Impossible to break even

Planning

Organizing

Commanding sleep

Controlling

systematic planning, implementing, monitoring and revising communication channels

only sending emails

only PR events

only financial reporting

creating and implementing new ideas, products and processes

cutting all R&D

only marketing ads

price regulation only

ICT-driven activities affecting all industries, productivity and competitiveness

only e-commerce websites

banknote design

agricultural policy only

Situation analysis (PEST, competitors, SWOT)

Budgeting only

Random tactics

No goals

Analysis → Goals → Strategy → Tactics → Budget → Control

Goals → Budget → Control → Strategy

Tactics → Strategy → Analysis

Control → Analysis → Budget

Product, Price, Place, Promotion

Profit, People, Process, Proof

Plan, Produce, Pay, Promote

Policy, Place, Promotion, People

Cash Cow

Star

Dog

Question Mark

Market penetration

Product development

Market development

Diversification

considering consumer wants, company requirements and society’s long-term interests

focusing only on short-term sales

ignoring environmental issues

pricing below cost

M × C (quantity sold × unit cost)

Total revenue/price

Q × P

GDP × exports

firm sales / total market sales ×100%

GDP / exports

exports / GDP

profit / assets

firm share / largest competitor share ×100%

firm sales / GDP ×100%

largest competitor / industry

profit / sales ×100%

Suppliers and customers in the target market

Interest rates and demographics

Culture at large

Global climate change

Continuous research

Single observation

Laboratory experiment only

Expert judgment only

Marketing

Finance

Accounting

Operations

Average market share

GDP growth rate only

Unemployment rate only

Exchange rate regime

Strengths and Weaknesses are internal; Opportunities and Threats are external

All factors are external

Only threats matter

Opportunities are internal

Customs union — common external tariff

FTA — common currency

PTA — free factor movement

Common market — only preferential tariffs

Horizontal sector that affects all industries and raises productivity

A niche that does not influence other sectors

Only hardware manufacturing

Only telecom regulation

10%

12.5%

15%

20%

25%

50%

75%

200%

$15,000,000

$500,000

$30

$1,500,000

Dog

Cash Cow

Star

Question Mark

Strategy

Control

Random goals

Only PR

0.1

0.2

0.5

2.0

$60,000

$600,000

$1,200,000

$6,000,000

sales + fines + compensations + interest

only dividends

wages + rent

depreciation

$150k

$200k

$250k

$300k

Product development

Market penetration

Market development

Diversification

Market penetration

Market development

Product development

Diversification

Dog

Cash Cow

Star

Question Mark

Strength=brand; Weakness=logistics; Opportunity=online demand; Threat=new taxes

Strength=taxes; Weakness=brand; Opportunity=logistics; Threat=online demand

Strength=brand; Weakness=taxes; Opportunity=logistics; Threat=online demand

Strength=logistics; Weakness=brand; Opportunity=taxes; Threat=online demand

Communication management

Finance management

Production management

Only HR

Control

Budget

Strategy

Goals

Innovation management

Only market penetration

Only PR

Batch production

microenvironment

macroenvironment

internal environment only

none

Dog

Question Mark

Cash Cow

Star

Political/legal in macroenvironment

Microenvironment

Internal

Price policy

25%

50%

62.5%

150%