3E Economics par. 5.2 and 5.5

• Economie
• Middelbare school
• vwo
• Leerjaar 3

Par. 5.1 assignment 5

1. Turnover € 4.800 Purchase value € 3.200
2. Turnover € 8.000 Gross profit € 3.200
3. Turnover € 8.000 Gross profit € 4.800
4. Purchase value € 4.800 Gross profit € 3.200

Par. 5.1 assignment 7

1. A 8.281 - 1.109 B 1.109 - 1.020
2. A 8.281 - 1.109 B 1.109 + 1.020
3. A 8.281 + 1.109 B 1.109 - 1.020
4. A 8.281 + 1.109 B 1.109 + 1.020

Par. 5.1 assignment 14

a> 10.000 / 100 = 100 revenue per product

b> No, not all variable costs are purchase value

Par. 5.1 assignment 14

c> At 100 products, total costs must have been 22.000, because we have a revenue of 10.000, but still have a loss of 12.000. 

The fixed costs are 20.000, so the variable costs must have been 2.000 at 100 products ( So 20 per product )

So at 200 products, the variable costs must have been 4.000, because they are proportional

Par. 5.1 assignment 14

d> Selling price equals 100, so TR = 100q

Variable costs equal 20 and Fixed costs equal 20.000, so

TC = 20q + 20.000

At the break even point TR = TC

100q = 20q + 20.000

80q = 20.000

q = 250

Par. 5.1 assignment 14

d> Other strategy, same answer

Selling price equals 100, Variable costs equal 20, so we have a margin of 80 for every product extra we make. 

To be break even we have to make up the Fixed costs first

 Fixed costs equal 20.000, so

Break even point = 20.000 / ( 100 - 20 )

q = 20.000 / 80

q = 250

par. 5.1 assignment 14a
What is not a good calculation?

1. 10.000 / 100
2. 20.000 / 200
3. 30.000 / 300
4. 30.000 / 600

TVC sales 200

TC sales 100

TVC sales 100

5.1 14b

10.000 + 12.000

22.000 - 20.000

2.000 / 100 x 200

3E Economics par. 5.2 and 5.5

Learning goals:

- Understand how the wage costs are built up

- Understand how labour productivity influences the wage costs per product and the export

- Understand and calculate depreciation costs

Wage costs <--> Net wage

Net wage = Gross wage - Taxes and Employee social insurance contributions

F.e. = 3.000 - 1.000 = 2.000

Wage costs = Gross wage + Employer social security contributions

bijv. = 3.000 + 500 = 3.500

                                     WIG

                                                                      Verschil loonkosten werkgever

                                                                                   en nettoloon werknemer

Contributions

contributions employee insurance schemes paid by employers

F.e. WW and WIA

contributions national insurance schemes paid by employees

F.e. AOW and ANW

Calculate the net wage:
Gross wage: € 3.000,-
Tax: € 800,-
employer's social security contributions € 75,-
employee's social security contributions: € 150,-

1. € 3.950,-
2. € 2.200,-
3. € 2.050,-
4. € 1.975,-

1. National insurance schemes are for everyone
2. Employee insurance schemes are for employees

1. 1= correct 2= incorrect
2. 1= incorrect 2=correct
3. Both are incorrect
4. Both are correct

Wage costs

When wage costs increase, Dutch companies could be forced to increase their selling price

This means that the Dutch international competitiveness could decrease

Increasing labour productivity could solve this

Causes higher labour productivity:

- Education

- Mechanisation , Automation

- Better division of labour, Specialisation

Labour costs per product will decrease if the percentual increase of the ...(1) is higher than the percentual increase of the ...(2)

1. 1 labour productivity 2 wage costs
2. 1 wage costs 2 labour productivity

graph page 155 ( blue and red )
The labour costs per product in 2003 will ...(1) and the labour costs in 2009 will ...(2)

1. 1 decrease 2 decrease
2. 1 decrease 2 increase
3. 1 increase 2 decrease
4. 1 increase 2 increase

                                                index wage costs

index wage costs per product = --------------------------- x 100

                                                        index labour productivity

The last 20 years the average wages in The Netherlands have increased by 50%. Because of technological developments labour productivity increased by 70%.
What was the change in wage costs per product?

1. 20% lower
2. 12% lower
3. 13% higher
4. 20% higher

                                                      index wage costs

index wage costs per product = ---------------------------- x 100

                                                                      index labour productivity             

index wage costs per product = 150 / 170 x 100 = 88

So wage costs per product 12% lower

Limiting wage increase

Labour costs per product are important for employment

Low labour costs per product --> Low prices Dutch companies

--> Better international competitiveness The Netherlands

 --> More demand for Dutch products --> More production 

--> More employees needed --> Lower unemployment

Hw.

Par. 5.2 assignments 4 and 8

Make 5 groups of 4 and 2 groups of 3 for project Dragons Den

Minor Test Economics Chapter 5 on May 22nd

Par. 5.2 assignment 4a

1. Gerard: 4 > 3
2. Frits: 7 > 4,50

Par. 5.2 assignment 4b

1. Gerard: 4,50 < 7
2. Frits: 7 > 4,50
3. Gerard: (4,50 / 4 < (7 / 3)
4. Frits: (7 / 3) > (4,50 / 4)

Par. 5.2 assignment 8a
Dutch international competitiveness will ...

1. Decrease
2. Increase

Par. 5.2 assignment 8b

1. 5 - 10
2. 10 - 5
3. 105 / 110
4. 110 / 105

3E Economics par. 5.5

Learning goals:

- Understand and calculate depreciation costs

Depreciation

Fixed assets decrease in value over the years

The costs of the fixed assets is spread over the years

                                                    Purchase value - Residual value

Depreciation per year = -------------------------------------

                                                   Service life

( Sometimes depreciation is a % of the purchase value or book value )

Depreciation

A machine is bought 1/1/2019 for € 90.000,-. The service life is expected to be 9 years and we expect to get € 18.000,- for the old machine when we sell it 1/1/2028.

What is the book value of the machine 31/12/2020?

A machine is bought 1/1/2019 for € 90.000,-. The service life is expected to be 9 years and we expect to get € 18.000,- for the old machine when we sell it 1/1/2028.
What is the book value of the machine 31/12/2020?

1. € 70.000,-
2. € 74.000,-
3. € 80.000,-
4. € 82.000,-

Assignment

Depreciation = ( 90.000 - 18.000 ) / 9 = 8.000

Book value = 90.000 - 2 x 8.000 = € 74.000,-

Assignments

Par. 5.5 assignments 8 and 11

Par. 5.5 assignment 8c

1. 5 x 25.500
2. 850.000 + 5 x 25.500
3. 850.000 - 5 x 25.500

Par. 5.5 assignment 11

1. ( 27.000 - 500 ) / 15
2. ( 27.000 + 500 ) / 15
3. ( 38.000 - 500 ) / 15
4. ( 38.000 + 500 ) / 15

Dragons Den

Dragons Den

2nd of June 13:15 - 15:15

End presentations, maximum 7 minutes

Hand in final report on the same day