Business administration specialization in economics

Specialization is considered key to economic efficiency based on theoretical and empirical considerations. Different individuals or nations may have different real opportunity costs of production, say from differences in stocks of human capital per worker or capital/labour ratios. According to theory, this may give a comparative advantage in production of goods that make more intensive use of the relatively more abundant, thus relatively cheaper, input. Even if one region has an absolute advantage as to the ratio of its outputs to inputs in every type of output, it may still specialize in the output in which it has a comparative advantage and thereby gain from trading with a region that lacks any absolute advantage but has a comparative advantage in producing something else.

It has been observed that a high volume of trade occurs among regions even with access to a similar technology and mix of factor inputs, including high-income countries. This has led to investigation of economies of scale and agglomeration to explain specialization in similar but differentiated product lines, to the overall benefit of respective trading parties or regions.

How to study supply and demand

To understand supply and demand better, you should remember:

1. Supply and demand is about trade. Buyers purchase goods with money, and sellers get money for selling goods. However, behind this exchange of money is the exchange of goods: Buyers are in effect trading what they make (and sell) for the goods they buy.

2. Suppliers and demanders are different. It is important to separate the buyers (demanders) from the sellers (suppliers) of a good. This is because they react in different ways to changes in the price as well as to changes in other variables. For example, a higher price reduces the quantity of the good that demanders want to buy but increases the quantity sellers want to sell. It is important, therefore, to understand which variables each group reacts to and how it reacts.

3. Events caused by price changes differ from those that cause price changes. Every thing caused by price changes is shown by a demand or supply curve; everything that causes the price to change is shown by a shift from an old to a new demand or supply curve.

4. The quantity of a good actually bought and sold need not equal the quantity demanded and supplied. Demand refers to how much buyers would like to buy at various prices. Supply refers to how much sellers would like to sell at various prices.

History of banks

When did the first banks appear? Linguistics (the science of language) and etymology (the study of the origins of words) suggest an interesting story about banking's origins. Both the Old French word banque and the Italian word banca were used centuries ago to mean "money-changer's table." This describes quite well what historians looking at the civilizations of Greece and Rome more than 2,000 year ago, have observed concerning the first bankers. They were money changing institutions, situated usually at a table or in a small shop in the commercial district, aiding travelers who came to town by exchanging foreign coins for local money or discounting commercial notes for a fee

The first bankers were goldsmiths. Several centuries ago, money consisted primarily of gold coins. Wealthy people found the amounts оf gold they accumulated quite heavy. An even bigger drawback was that thieves love gold. Looking around for safe places to store their wealth, people in medieval Europe thought of goldsmiths. Goldsmith made jewelry, gold statues, and other precious goods. Most also had some excess space in their heavily guarded vaults.