"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." - Ronald Reagan
Economics is the study of how people allocate scarce resources for production, distribution, and consumption, both individually and collectively.
Two major types of economics are microeconomics, which focuses on the behavior of individual consumers and producers, and macroeconomics, which examine overall economies on a regional, national, or international scale.
Economics is especially concerned with efficiency in production and exchange and uses models and assumptions to understand how to create incentives and policies that will maximize efficiency.
Economists formulate and publish numerous economic indicators, such as gross domestic product (GDP) and the Consumer Price Index (CPI).
Capitalism, socialism, and communism are types of economic systems.
Waste does not exist in nature because ecosystems reuse everything that grows in a constant cycle of efficiency and purpose.
A Kinetic Capital economy does not replace people or things, in order for it to function. Instead we help transform and repurpose the people and places where we work.
British botanist Arthur Tansley to refer to a localized community of living organisms interacting with each other and their particular environment of air, water, mineral soil, world of commerce. As he wrote in a 1993
Harvard Business Review article:
Successful businesses are those that evolve rapidly and effectively. Yet innovative businesses can’t evolve in a vacuum. They must attract resources of all sorts, drawing in capital, partners, suppliers, and customers to create cooperative networks. . . . I suggest that a company be viewed not as a member of a single industry but as part of a business ecosystem that crosses a variety of industries. In a business ecosystem, companies co-evolve capabilities around a new innovation: They work cooperatively and competitively to support new products, satisfy customer needs, and eventually
incorporate the next round of innovations.
Importance of the Quality of Life
Economic Development isn’t really about just increasing the number of businesses or the number of jobs. We all know that. The reason why communities do economic development, why they invest time and resources in it, is to make sure that the local economy has what it needs and is doing what it is necessary to support the health of the overall system. The purpose of economic development, at its core, is to help the community become stronger by making sure that the economic part of the ecosystem is fulfilling its role adequately. Build resiliency — to equip our communities to be able to bounce back from setbacks.
NOT JUST BUYING AND SELLING
Economic vitality depends on the health of a community, and that a community is not a set of separate, unrelated systems — a business district, a school system, a park system, a street system — but an ecosystem.
We’re starting to talk about the importance of “quality of life” as not just a planning function, but as a lynchpin of economic growth.
Network of organizations—including suppliers, distributors, customers, competitors, government agencies, and so on—involved in the delivery of a specific product or service through both competition and cooperation.
An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. The economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organisms also include suppliers, lead producers, competitors, and other stakeholders. Over time, they coevolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments, and to find mutually supportive roles.
All of economics is meant to be about people’s behavior. So, what is behavioral economics, and how does it differ from the rest of economics? The field of behavioral economics blends ideas from psychology and economics, and it can provide valuable insight that individuals are not behaving in their own best interests.
Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the decisions of individuals and institutions and how those decisions vary from those implied by classical economic theory. All of economics is meant to be about people’s behavior. So, what is behavioral economics, and how does it differ from the rest of economics? Behavioral economics provides a framework to understand when and how people make errors. Systematic errors or biases recur predictably in particular circumstances.
Lessons from behavioral economics can be used to create environments that nudge people toward wiser decisions and healthier lives. Traditional economics uses these assumptions to predict real human behavior. In contrast, behavioral economics shows that actual human beings do not act that way. Behavioral economics attempts to integrate psychologists’ understanding of human behavior into economic analysis. In sum, the basic message of behavioral economics is that humans are hard-wired to make judgment errors and they need a nudge to make decisions that are in their own best interest. The understanding of where people go wrong can help people go right.
The Science of Money
This property of money has direct and severe implications for both the economy and society at large. Understanding, therefore, the nature of money is of the utmost importance to correct our understanding of the economy.
Quantum economics is an emerging research field which applies methods and ideas from quantum physics to the field of economics. It is motivated by the belief that economic processes such as financial transactions have much in common with quantum processes, and can be appropriately modeled using the quantum formalism.
FINANCE VS. ECONOMICS
Economics and finance are interrelated and inform and influence each other. Investors care about these studies because they also influence the markets to a great degree. It's important for investors to avoid "either/or" arguments regarding economics and finance; both are important and have valid applications.
As a general social science, the focus of economics is more on the big picture, or general questions about human behavior around the allocation of real resources. The focus of finance is more on the techniques and tools of managing money. Both economics and finance focus on how companies and investors evaluate risk and return.
Net sales is the remainder after all sales returns, allowances and sales discounts have been deducted from the gross sales (or gross revenue).
A business' sales represent the sum of payments received for selling products or services. But companies do not immediately receive all of their sales in cash. The final amount of received payments may not reflect the invoices sent to customers.
ACCOUNTING PROFIT CALCULATOR
The best way to understand the concept of accounting profit is to compare the two fundamental methods of defining profit: accounting vs economic profit.
Accounting profits are represented on the firm's income statements, and the accounting department is responsible for reporting this to the manager. Thus, it doesn't include the implicit costs, which are the opportunity costs of giving up the best alternative use of the resource.
Markup formula describes the ratio of the profit made to the cost paid.
The basic rule of a successful business model is to sell a product or service for more than it costs to produce or provide it. The difference between the cost of a product or service and its sale price is called the markup (or mark-on).
ECONOMIC PROFIT CALCULATOR
If you've ever thought about setting up a business, one of the first questions you asked yourself is probably "What would be my profit?" There are two crucial elements of profit: revenue and cost.
The economic profit calculator is a tool that helps you estimate profit from an economic perspective. By applying the economic profit formula, you might be able to make better economic decisions in certain situations.
The formula for discount is exactly the same as the percentage decrease formula:
Just follow these few simple steps:
Find the original price (for example $90)
Get the the discount percentage (for example 20%)
Calculate the savings: 20% of $90 = $18
Subtract the savings from the original price to get the sale price: $90 - $18 = $72
You're all set!
The revenue calculator applies the simple revenue formula, which is the following:
total revenue = price * quantity
Knowing how to calculate total revenue isn't enough! If you've ever wondered how managers decide on which price strategy to use to maximize their revenue, you are in the right place. Businesses all around the world apply the total revenue test to support cash-flow management.
Find out an item's revenue, assuming you know its cost and your desired profit margin percentage.
You can calculate any of the main variables in the sales process - cost of goods sold (how much you paid for the stuff that you sell), profit margin, revenue (how much you sell it for) and profit - from any of the other values. In general, your profit margin determines how healthy your company is -
AVERAGE VARIABLE COST CALCULATOR
Variable Costs (VC) are the costs that depend on the quantity of the goods produced. Examples of such costs are the costs of human labor, electricity costs, gasoline used in the production and transportation process, etc. To get the value of VC, you sum up all the marginal costs over all produced units; and Total Output (Q), the quantity of goods produced over a certain time period.
SALES TAX CALCULATOR
Sales tax is a consumption-based tax that is indirectly charged on the consumer at the point of final purchase of a good or service.
The indirect feature of the tax means that the consumer bears the burden of the tax, however it's collected and transferred to authorities by the seller. The most popular type of sales tax is the retail sales tax which is issued at the state-level in the United States.
CONSUMER SURPLUS CALCULATOR
Consumer surplus is the difference between the price that consumers actually pay, and the maximum price that they are willing to pay.
If you have ever attended an economics lecture, you have probably seen curves representing supply (S) and demand (D) as a function of price (P) versus quantity (Q). The demand curve (D) is downward, as a lower price implies a higher demand for a given article. The supply curve (S), in contrast, is upward, since manufacturers produce more if they can sell their product at a higher price. The consumer surplus is the area between the equilibrium price (the level of price where the two curves cross each other) and the demand curve. See below.
OPTIMAL PRICE CALCULATOR
Optimal price is the price per unit at which the overall profit is maximized.
To determine the optimal price, you need to provide it with the following values:
Marginal cost: this is the cost of producing one additional unit of your product.