Scarcity

Accounting Is   the Language of Business Every business organization that has economic resources, such as money, machinery, and buildings, uses accounting information. For this reason, accounting is called the language of business. Accounting is considered an art It requires the use of skills and creative judgment. One has to be trained in this discipline to be able to perform accounting functions well.  Accounting is also considered a science  It is a body of knowledge.

Production –  Process of adding value to a product (using four factors of production – land, labour, capital and enterprise) to satisfy customer needs and wants.  Production is the effective management of resources in producing goods and services. The operations department in a firm overlooks the production process. It is the creation of utilities or the making of things using the available resources. 

Definition of profit: Profit is a valuable return  or gain. It is the excess of returns over expenditure in a transaction or series of transactions especially, the excess of the selling price of goods over their cost. It can also be called a net income usually for a given period of time. A ny profits earned in a business funnel back to business owners, who choose to either pocket the cash or reinvest it back into the business.

PRODUCTION POSSIBILITY FRONTIER (PPF) A  production possibility frontier  ( PPF ),  production possibility curve  ( PPC ), or  production possibility boundary  ( PPB ), or  transformation curve/boundary/frontier  is a curve which shows various combinations of the amounts of two goods which can be produced within the given resources and technology/a graphical representation showing all the possible options of output for two products that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time. A PPF illustrates several economic concepts, such as  allocative efficiency ,  economies of scale ,  opportunity cost  (or marginal rate of transformation), productive efficiency, and  scarcity  of resources (the  fundamental economic problem  that all societies face).

#1 - Review Your Existing Workflow You won’t know what can be changed until you know how everything works now. Three areas contain critical information to help you identify needed changes. People  - Do you have people with the right skills in the right places? Do you have a project manager to keep the critical pathway visible and on track? Are objectives clearly defined, realistic, and safe? Processes  - When was the last time you mapped your processes? Have you used value stream mapping to assess process improvement projects? Where are the pain points and bottlenecks? Equipment and technology  - Is all your equipment in good repair? Is the technology you rely on optimal for your current needs? How easy is it to make changes in production? Before you make any changes, understand how everything works now. There is still value in the saying, “If it ain’t broke, don’t fix it.” Unless you can identify a financial or safety reason for making a change, think long and hard about...

Advantages of New Technology in the Workplace Technology is always evolving, with new software constantly emerging to solve problems and inefficiencies that companies may not even be aware of yet. Business leaders can sometimes feel overwhelmed in the face of so much change – there’s often a desire to stick with current technology and processes rather than rocking the boat. But the status quo threatens innovation, and stagnant companies put themselves in danger of failure. By investing in cutting-edge technology, you’re investing in growth. And you’re empowering employees to keep up, and get ahead, in a fast-paced world. Here are five areas new technology brings advantages to the workplace: 1. Speed, Efficiency, and Agility The goal for any new office technology is to speed up workflow processes, giving your employees the ultimate resource – more time – to focus on the important work. Businesses best their competitors by being able to respond to data, adapt to changes, and make informe...

What Is a Multinational Corporation (MNC)? A multinational corporation (MNC) has facilities and other assets in at least one country other than its home country. A multinational company generally has offices and/or factories in different countries and a centralized head office where they coordinate global management. These companies, also known as international, stateless, or transnational corporate organizations tend to have budgets that exceed those of many small countries.  Advantages of Multinational Corporations in developing countries Multinationals provide an inflow of capital into the developing country. E.g. the investment to build the factory is counted as a capital flow on the financial account of the balance of payments. This capital investment helps the economy develop and increase its productive capacity. The  Harrod-Domar  model of growth suggests that this level of investment is important for determining the level of economic growth. One of the best ways t...

The impact of globalisation on business Increased competition  - this is caused by more foreign investment flowing to countries, de-regulation which allows businesses to enter markets from which they once precluded. Greater awareness  and reactions to customer needs - the consumer is now very selective on such essentials as quality, service and price. Economies of scale  - by selling across many continents business can acquire economies of large-scale production. This makes them very competitive. Location flexibility  - many modern production techniques and service provisions can be allocated almost anywhere. This allows to them gain the advantages of low cost labour and other resource charges. Increased mergers and joint ventures  - allowing access to bigger markets and associated cost advantages.

Benefits of free trade Free trade means that countries can import and export goods without any tariff barriers or other non-tariff barriers to trade. Essentially, free trade enables lower prices for consumers, increased exports, benefits from economies of scale and a greater choice of goods. In more detail, the benefits of free trade include: 1. The theory of comparative advantage This explains that by specialising in goods where countries have a lower opportunity cost, there can be an increase in economic welfare for all countries. Free trade enables countries to specialise in those goods where they have a  comparative advantage . 2. Reducing tariff barriers leads to trade creation Trade creation  occurs when consumption switches from high-cost producers to low-cost producers. The removal of tariffs leads to lower prices for consumers (Prices fall from P1 to P2) This fall in prices enables an increase in consumer surplus of areas 1 + 2 + 3 + 4 Imports will increase from Q3-Q2...

The importance of international trade International trade between different countries is an important factor in raising living standards, providing employment and enabling consumers to enjoy a greater variety of goods. International trade has occurred since the earliest civilisations began trading, but in recent years international trade has become increasingly important with a larger share of GDP devoted to exports and imports. World Bank  stats  show how world exports as a % of GDP have increased from 12% in 1960 to around 30% in 2015. With an increased importance of trade, there have also been growing concerns about the potential negative effects of trade – in particular, the unbalanced benefits with some losing out, despite overall net gains. World exports of goods and services have increased to $2.34 trillion ($23,400 billion) in 2016. Importance of trade 1. Make use of abundant raw materials Some countries are naturally abundant in raw materials – oil (Qatar), metals, fi...

WHAT IS SADC? The main objectives of Southern African Development Community (SADC) are to achieve economic development,  peace and security,   and growth, alleviate poverty, enhance the standard and quality of life of the peoples of Southern Africa, and support the socially disadvantaged through   Regional Integration . These objectives are to be achieved through increased   Regional Integration , built on democratic principles, and equitable and sustainable development. The objectives of SADC, as stated in Article 5 of the  SADC Treaty  (1992) are to: Achieve development and economic growth, alleviate poverty, enhance the standard and quality of life of the people of Southern Africa and support the socially disadvantaged through Regional Integration; Evolve common political values, systems and institutions; Promote and defend peace and security; Promote self-sustaining development on the basis of collective self-reliance, and the inter-dependence of Member...

WHAT IS COMESA? The Common Market for Eastern and Southern Africa (COMESA) was established in 1984 as a strengthened successor to the Preferential Trade Area founded in 1981 for the countries in eastern and southern Africa. Recognizing the potential benefits of regional trade to their economies and peoples, 20 countries now make up COMESA: Angola; Burundi; Comoros; Democratic Republic of Congo; Djibouti; Egypt; Eritrea; Ethiopia; Kenya; Madagascar; Malawi; Mauritius; Namibia; Rwanda; Seychelles; Sudan; Swaziland; Uganda; Zambia; and Zimbabwe. COMESA’s objectives include: A full free trade area guaranteeing the free movement of goods and services produced within COMESA and the removal of all tariffs and non-tariff barriers; A customs union under which goods and services imported from non-COMESA countries will be subject to an agreed single tariff in all COMESA states; Free movement of capital and investment supported by the adoption of common investment practices in order to create a mo...

Effect of the exchange rate on business The exchange rate will play an important role for firms who export goods and import raw materials. Essentially: A depreciation (devaluation) will make exports cheaper and exporting firms will benefit. However, firms importing raw materials will face higher costs of imports. An appreciation makes exports more expensive and reduces the competitiveness of exporting firms. However, at least raw materials (e.g. oil) will be cheaper following an appreciation. Effect of depreciation in the exchange rate If there is a depreciation in the value of the Pound, it will make UK exports cheaper, and it will make imports into the UK more expensive. In this example: At the start of 2007, the exchange rate was £1 = €1.50. By Jan, 2009, the Pound had fallen in value so £1 was now only worth €1.10 (a depreciation of 26%) Impact on British exporters Suppose a British car costs £4,000 to build and sells for  £5,000  in the UK. In 2007, the European price of ...