CH01.02 Four factors to improve your international position

• Economie
• Middelbare school
• vwo
• Leerjaar 3

Welcome

3 TVWO

Chapter 1

The Netherlands and the world

Lucas and Fleur booked a shopping trip to London. The bought €500 worth of pounds. The exchange rate at that moment was €1 = £0,84.
Back home they have £98 left. The current exchange rate is £1 = €1,25.

How much money, expressed in euro's, did they spend during the weekend according to the latest exchange rate?

Today's learning outcome

By the end of this lesson you should be able to explain the four most important factor for a better international competitive position.

What factors do you
think are important?

The four most important factor for a better international competitive position

• natural circumstances;

• wage costs;

• the infrastructure;

• historical circumstances.

Natural circumstances

- Climate

- National resources

Netherlands -> Farmers cheeses

France -> Wine

Kuwait -> Oil

Can you think of another product that the Netherlands export because of natural circumstances?

Wage costs

Lower wages -> lower production cost 

Wage per product:

An employee ears €30,000 per year and produces 1,000 bikes. His wage per product is: 30,000/1,000 = €30

An employee in an other country earns €2,500 per year and produces just 50 bikes. Which one of the employees has the lowest wage cost per bike?

Employee A earns €30,000 per year and produces 1,000 bikes. His wage per product is: 30,000/1,000 = €30

Employee B in an other country earns €2,500 per year and produces just 50 bikes. Which one of the employees has the lowest wage cost per bike?

1. Employee A
2. Employee B

The infrastructure

A better infrastructure leads to faster transportation and communication -> lower costs

Historical circumstances

Why does the Netherlands produces Tulips?

Why does Germany produces so many cars?

Historical circumstances

Why does the Netherlands produces Tulips?

Why does Germany produces so many cars?

Just because we've always done that. The Germans starten fabricating the first cars and they're specialised in fabricating cars.

Homework

Society Chapter 1

Assignments 1.6 up to and including 1.13

Importance: 

Practice with the four factors that improve the international competitive position.