3E Economics par. 9.1

• Economie
• Middelbare school
• vwo
• Leerjaar 3

Par. 6.4
assignment 3

1. a, f
2. b, e
3. c, d

Par. 6.4 assignment 18a
Purchasing power ...(1) after 2009, which proves that negotiation power of employees ...(2)

1. 1 decreased 2 decreased
2. 1 decreased 2 increased
3. 1 increased 2 decreased
4. 1 increased 2 increased

Par. 6.4 assignment 18c
What is not a possible argument?

1. Dutch companies will not move to low wage countries
2. Less mechanisation
3. Better Dutch international competitiveness
4. Less purchasing power

Supply chain

A supply chain shows us which companies are part of the production path of a product

You can show the flow of products and the flow of money in a supply chain

How is a product produced?

From a tree to a canoe in the shop

• Timber trade
  

• Canoe-factory
  

• Wholesale
  

• Shop

• Lumberjacks
  

How is a product produced?

From a tree to a canoe in the shop

• Timber trade
  

• Canoe-factory
  

• Wholesale
  

• Shop

• Lumberjacks
  

Supply chain

Show the different companies that work together to produce a final product 

• € 180
  

• € 95
  

• € 63
  

• € 28
  

How is a product produced?

From a tree to a canoe in the shop

• Timber trade
  

• Canoe-factory
  

• Wholesale
  

• Shop

• € 15
  

• Lumberjacks
  

Which company do you think is economically the most important in this production chain?

1. Lumberjacks
2. Timber trade
3. Canoe factory
4. Wholesale

• € 180
  

• € 95
  

• € 63
  

• € 28
  

How is a product produced?

From a tree to a canoe in the shop

• Timber trade
  

• Canoe-factory
  

• Wholesale
  

• Shop

• € 15
  

• Lumberjacks
  

Added value

The value added to the product when a company in the supply chain does something extra

• € 13

• € 35

• € 32

• € 85

• € 15

Every stage has a higher price, because of costs and profit margin in that stage

Added value = Turnover - Purchase price - 3rd party services

Primary incomes: rewards for the production factors

Added value = all primary incomes

Added value = all wages, rent, interest, leases and profits

Added value = 1.000 - 100 - 100 = 800

Added value = 350 + 150 + 100 + 200 = 800

GDP of a country equals all the added values in a country

GDP

Take into account when measuring GDP:

- number of inhabitants

- price level

- income inequality

- self sufficiency

- black market

rich countries <-> developing countries

When the real GDP increases we speak of economic growth

Economic growth is the result of more and better production factors

- technological innovation, better capital goods

- training, better skilled labourers

rich countries <-> developing countries

Vicious Cycle of poverty

Low income 

/                        \

                         Low production               Low level of savings                    \                          /

Low investments in technology and education

Hw.

Par. 9.1 Assignments 9 and 11