3
vwo
tto
Economics havo & vwo
Economics havo & vwo
textbook
ISBN 978 90 345 9602 4
559857
3 vwo • tto • textbook
Economics havo & vwo
3 vwo • tto • textbook
Authors
Drs. Peter Adriaansen
Dr. Aad Zuiderwijk
Editor-in-chief
Drs. Peter Adriaansen
www.praktischeeconomie.nl
Fifth edition
Malmberg, ’s-Hertogenbosch
Introduction
In this book, you will be examining your environment and society through the perspective of economics.
Economics is all about making choices based on the available means. Consumers, businesses and the
government all have to deal with the same choices. Economics examines how these choices are made.
Economics has a number of key principles. These include:
– Everyone must choose what the available money will be spent on. Not everything is possible, there
is scarcity.
– Exchanging is important in an economy. In early times, people exchanged products. Now we usually
exchange money for a product.
– Supply and demand determine the price of many products. When a product is in great demand, the
price of the product will increase.
The eight most important principles or ‘concepts’ of economics are dealt with extensively in the second
stage of secondary education. This book will give you basic knowledge about all these concepts. If
you can do the exercises and assignments in this book correctly, you should be able to complete the
subject of economics in the second stage of secondary education successfully. You can also select
the subject of Management and Organisation (M&O) in the second stage of secondary education.
M&O focuses on business and industry only; how companies are organised, for example, how they
get funding and how they advertise. Chapters 3, 4 and 5 provide a taster of M&O. Praktische Economie
is a ‘leeropdrachtenboek’. The sections contain learning material – the theory texts – plus questions
and assignments. You can put the answers in your own exercise book. All the theory and questions
are also available in the digital version of Praktische Economie. Your answers will be recorded in this
version, which also contains some extra exercises and diagnostic tests. The structure of this Praktische
Economie book is explained on the page opposite.
There are nine chapters. Each chapter consists of different components:
Chapter-introduction with initial assignments
Chapter 2
The market of
supply and demand
A specific example is provided to give you an initial idea of the contents
of the chapter.
Knowledge & Application
In these Knowledge & Application sections, the economic terms and
their definitions are explained, you learn the theory and you answer
initial assignment
questions and carry out assignments. Every section starts with a
practical example. Next, you will find questions and assignments
concerning the practical example and then the first theory text follows.
The questions and assignments often refer to a source. This may be
a textual source but may also be a photograph or graph. The sources
2
1
On Wednesday evening, the Suske and Wiske (Spike and
Suzy) comic book Op het eiland Amoras fetched € 5,000 at
an auction of the work of creator Willy Vandersteen. In 1947,
the comic book could be bought for 36 Belgian francs (less
than one euro). Old Suske and Wiske (Spike and Suzy) comic
books were in great demand. The first comic book, Rikki and
Wiske, from 1946, was sold for € 2,200. After it had been first
published, Willy Vandersteen decided to replace Rikki with
Suske (Spike), because Rikki was too similar to Kuifje (Tintin).
At a comic book auction, collectors bid against each other.
The person who places the highest bid is the lucky one, but
sometimes at a very high price indeed ...
2
What could be the reason why the
oldest comic book (Rikki and Wiske)
was sold for less than Op het eiland
Amoras? Give two possible reasons.
How can the price at the auction
increase to such an extent when
dozens of collectors want to buy Op
het eiland Amoras and there is only
one copy of the comic book?
(Adapted from: Het Parool)
Chapter 2
The market of supply and demand
39
provide knowledge which you will need when answering the questions
knowledge & application
Section 3
and doing the assignments. Each section contains a number of theory
intro
Going, going, gone!
texts with related questions and assignments. Each section ends with a
final assignment which is often slightly more difficult than the others in
The market mechanism in the street
Sections 1 and 2 dealt with the demand and supply curves. In this section, demand
and supply meet. Together they determine the price on the market as is the case in
the cartoon where the police stop a car containing illegal items. The demand for the
illegal items remains the same. Due to the police confiscation, the supply is, however,
decreased. Result: the price on the market increases.
that section. The final assignments test whether you can really handle
economics at the second-stage level of secondary education.
Understanding...
1
In these sections, you study one or more aspects of economics with
Which curve immediately shifts as a result of the police’s action?
A The demand curve shifts to the left.
B The demand curve shifts to the right.
C The supply curve shifts to the left.
D The supply curve shifts to the right.
Source 1 On this market supply and demand meet physically.
the help of a number of sources. Here you will be applying the theory
you have learnt in the rest of that chapter. The questions in these
sections are slightly more difficult than the questions in the Knowledge
Chapter 2
& Application sections. In some cases, for example, you have to find
The market of supply and demand
49
understanding ...
Section 5
sources yourself or make your own summary.
Understanding ...
the car market
During the 2008-2013 period:
- The total demand for cars decreased greatly;
- Small, economical cars became more popular than large, heavy ones.
A teacher gives 3 vwo students the assignment to determine the background to this
development. Maurice and Fatima work together on this assignment and they collect
eleven sources on the topic (sources 1 to 11 on pages 61 to 63). Fatima interviewed her
next-door neighbour, who also started driving a smaller car (see source 1).
Economic skills
In this section you will practise your economic skills, including
1
2
calculating using percentages and indices, drawing and calculating using
Calculate how much money (in euros) the neighbour saves with her new small
car in comparison with a new large car. Assume a petrol price of € 1.80.
Give two examples of fixed costs that are higher with a large, heavy car than
with a smaller, lighter car.
“Now we know one cause,” says Maurice. “The price of petrol increased considerably
between 2008 and 2013. This is, in part, also reflected by another source.”
3
a supply and demand curve and calculating using the Dutch tax system.
4
How can you conclude from source 5 that the price of petrol (Euro 95) increased
by approximately 30% between the end of 2008 and the beginning of 2011?
Use source 5 to estimate the percentage by which the oil price increased
between the end of 2008 and the beginning of 2011.
Maurice does not quite understand: “Petrol is an oil product. And the oil price increases
much more than the petrol price as a percentage. How is this possible?”
Fatima spots the answer to Maurice’s question in one of the sources.
5
Terminology & Summary
Which source gives an answer to the question why the petrol price increases
less than the oil price as a percentage? Explain your answer.
Fatima wonders why the oil price increases so significantly. Maurice thinks that the
market form is one of the causes.
6
This part provides a list of terms from the relevant section and their
From which sources can you conclude that the oil market is an oligopoly?
Explain your answer.
Fatima wonders: “So, petrol prices may have increased because of the oligopolistic
market. That is why my neighbour bought a smaller car, just like many other drivers,
according to source 2. But is that the whole explanation?”
7
definitions. The summary sums up the main points of the study texts
The market share is the share a provider or a product has of total sales in that
market during a specific period.
a Use source 2 and make a calculation showing that the market share of the
cleanest cars with label A in 2008 is approximately 12% of new cars.
in that chapter. This is a useful tool to test whether you are sufficiently
Chapter 2
familiar with the essential aspects from the study texts when you are
The market of supply and demand
59
economic skills
Section 6
preparing for a test.
Practising using supply
intro
and demand curves
How the digital version works.
theory
The digital version contains all the same theory, questions and
assignments from the book. In the digital version, you enter your
answers in the spaces and fields provided. You can check the answers
Source 1
Demand for T-shirts
yourself or your teacher can check them - this depends on the system
This section gives an additional explanation and exercises regarding a very important
aspect of economics: supply and demand functions. The supply and demand of T-shirts is
used as an example.
Apply the explanation in this section when answering the questions. The explanation is a
useful example to follow.
The demand curve
A demand curve indicates per price the number of units consumers want to buy at that
price. With a lower price, more consumers want to buy the product. This means that if the
price decreases, the quantity demanded will increase. That is why the demand curve is a
downward sloping curve. The minus sign in the demand curve equation indicates that it
relates to a downward sloping curve. The same applies when the situation is reversed: if
the price increases, demand will decrease.
In source 1, the equation of the demand curve is Q d = –50P + 2,000 (Q d = demand for
T-shirts, P = price of a T-shirt in euros). The figure before P (–50) indicates how the
quantity demanded changes if the price changes. This demand curve shows that the
quantity demanded decreases by 50 items if the price is increased by € 1.
Therefore, if the price decreases by € 10, demand will increase by 500.
–50 indicates the relation between the vertical change (–1) and the horizontal change
(+50).
1
chosen by your teacher. Aspects that you find difficult can be practised
more as the digital version gives you more – or less – explanation and
,
,
2
questions depending on your previous answers. Finally, you can take a
3
diagnostic test. These tests are designed to assess whether you have
64
practised enough for the test and have mastered all the subject matter
Q d = –50P + 4,000 (Q d = demand for Replay jeans in number of units, P = price of
a Replay pair of jeans in euros).
a How many pairs of jeans are demanded if the price is P = 20?
b How many pairs of jeans are demanded if the price is P = 60?
c
Draw the demand curve.
(P on the vertical axis up to P = 100, Q on the horizontal axis up to Q =
5,000)
d A Replay pair of jeans sells for € 55. Which amount do the consumers spend
in total on the purchase of Replay jeans?
e How many fewer pairs of jeans will be demanded if the price is increased by
€ 1?
f How many fewer pairs of jeans will be demanded if the price is increased by
€ 12?
Suppose that the demand for Replay jeans changes to: Q d = –50P + 6,000.
a Has the demand for Replay jeans now been decreased or increased? Explain
your answer.
b Think of a cause for this change.
Suppose that the demand for Replay jeans in the initial situation changes to:
Q d = –100P + 6,750.
Chapter 2
The market of supply and demand
terminology & summary
sufficiently.
Section 3
Terminology
Demand curve
A curve that indicates per price the number of
units consumers want to buy at that price.
Income
The amount of money someone receives in a
certain period, for example in the form of wages or
state benefits.
Purchasing power (of the income)
The quantity of products and services that can be
purchased with the income.
Quantity demanded
The number of units consumers want to buy at a
certain price.
Equilibrium price
The price where the quantity demanded equals the
quantity supplied.
Equilibrium quantity
The quantity where the quantity demanded equals
the quantity supplied.
Excess demand
The quantity demanded is higher than the quantity
offered.
Excess supply
The quantity supplied is higher than the quantity
demanded.
Market equilibrium
The quantity demanded equals the quantity
supplied.
Market mechanism
The interplay between supply and demand ensures
that an equilibrium price is created on the market.
Section 2
Section 4
Cost price
The costs per product.
Fixed costs
Costs that do not depend on the number of
produced products or services.
Quantity supplied (quantity offered)
The number of units consumers want to buy at a
certain price.
Sales
The number of units that are sold.
Supply curve
A curve that indicates per price the number of
units manufacturers want to sell at that price.
Total costs
Variable costs + fixed costs.
Total profit
Total revenue – total costs.
Turnover (total revenue)
Sales × price per product.
Variable costs
Costs that depend on the number of produced
products or services.
Cartel
Suppliers agree to restrict competition.
Competition
Businesses competing to win the customers’
favour.
Heterogeneous product
A product that, according to consumers, is
different from the other products on the market.
Homogeneous product
A product that is equal to the other products on
the market in the eyes of the consumer.
Monopolistic competition
A market form with many suppliers of a
heterogeneous product.
Monopoly
A market form where a single supplier controls the
market.
Oligopoly
A market form where a few suppliers control the
market.
Perfect competition
A market form with many suppliers of a
homogeneous product.
Price war
Suppliers introduce price decreases in response to
the price decreases of a competitor, resulting in a
strong drop in prices.
Section 1
Good luck with Praktische Economie
The authors
rental in euros per month
Source 4
number of rental units of Zarkos in the city centre (x100)
×
supplied number
requested number
Chapter 2
The market of supply and demand
67
3
Table of contents
Introduction2
Chapter 1
Scarcity and exchange
6
knowledge & application
1 You don’t get something for nothing
2 Choosing means losing
7
12
3 Exchange is beneficial for all
18
4 The value of money
24
understanding …
5 Scarcity and exchange
29
economic skills
6 Percentage calculations
34
terminology and summary
Terminology and summary
37
Chapter 2
The market of supply
and demand
39
knowledge & application
1 Buying means choosing
40
2 Profit is profit
45
3 Going, going, gone!
49
4Jack-of-all-trades
55
understanding …
5 The car market
59
economic skills
6 Practising using supply and demand curves
64
terminology and summary
Terminology and summary
67
Chapter 3
Starting your own business
69
knowledge & application
1 Starting your own business
70
2 The form of the enterprise
75
3 Managing an organisation
80
understanding …
4 A company’s environment
86
economic skills
5 Processing knowledge
90
terminology and summary
Terminology and summary
4
94
Chapter 4
Balancing the books
Chapter 7
96
knowledge & application
1 Setting up a business
Exchange over time
185
knowledge & application
97
1 Time is money
186
2 Assets and debts
102
2 Enterprises set in time
193
3 Revenue and costs
106
3 The future started long ago
198
4 Government and the future
202
understanding …
4 The accounts
112
5 From balance sheet to balance sheet
115
121
206
economic skills
6 Nominal and real indices
terminology and summary
Terminology and summary
understanding …
5 Looking after the future
economic skills
209
terminology and summary
Terminology and summary
211
Chapter 5
The costs of a company
123
knowledge & application
Chapter 8
Working together without risk
213
1 Turnover, costs and profit
124
knowledge & application
2 Personnel and production
131
1 Who is best at negotiating?
3Advertising
136
2 Negotiating at a higher level
217
3 Do not risk it!
221
4 It’s your own fault!?
227
understanding …
4E-commerce
142
understanding …
economic skills
5 Depreciation on fixed assets
146
5 Issues related to disability benefits
232
economic skills
terminology and summary
Terminology and summary
214
149
6 Insurance calculations
236
terminology and summary
Terminology and summary
Chapter 6
More knowledge about
the market
151
knowledge & application
1 Crossing borders
152
2 The effects of the market
157
3 Do we live in a ‘nanny state’?
162
4 The labour market
169
understanding …
5 Fair taxes
6 Calculating income tax
Good times, bad times
242
knowledge & application
1 Earning an income
243
2 How do we share the pie?
248
3 Good times, bad times
254
4 Adjustments by government
259
understanding …
178
economic skills
183
terminology and summary
terminology and summary
Terminology and summary
Chapter 9
174
economic skills
240
5 Making cuts
6 Calculating using the consumer price index
264
267
Terminology and summary
271
Index 273
Editing, design and production
275
5
Chapter 1
Scarcity and exchange
initial assignment
1
Christine (16) waits tables at a pavement café when the
weather is good.
Christine: “It is hard work but I enjoy it. I do not earn much
but I do get quite some money in tips. My brother taught me
how to do that. If the change is, for example, € 10.60, you
first give the customer the ten euro banknote. Then you look
for the sixty cents. Many customers say: It’s all right, forget
it. A smart move, don’t you think? If you do it the other way
around, it does not work. You should first give them the ten
euro banknote. Older colleagues say the tips are less than
they used to be. Customers nowadays often pay using their
debit card and that means they do not tip. The recession does
not help either. People have less to spend and no longer have
the means to eat and drink lavishly at a pavement café. Less
consumption also means fewer tips.”
6
Chapter 1
2
3
4
hy is the catering sector particularly
W
sensitive to economic ups and downs?
C hristine uses the word ‘the means’.
What does she mean by that?
“ Less consumption also means fewer
tips”, says Christine. What does she
mean by ‘consumption’?
W hy does Christine receive less tips
when people pay using their debit
card?
Scarcity and exchange
knowledge & application
Section 1
You don’t get something
intro
for nothing
ADO-070 wants advice
Message from ‘ADO-070’ on forum.scholieren.com: “My friend and I want to start an
organic food delivery service in The Hague as more and more people are into organic
food. What do you need to do in order to start up a business? We know we have to
register at the Chamber of Commerce, apply for a VAT number and open a business bank
account. But under whose name should this be done? Is the fact that we are minors a
problem? And so on. I am 14 and my friend is 16. We are both boys and go to secondary
school. We are working on a web shop. I do not want to spend more than € 100 on a web
shop. Registering at the Chamber of Commerce costs € 85, delivery bicycles cost € 400,
advertising costs € 100 and hosting and a domain cost € 30.”
‘Ullekopf’ provides good advice on the forum: “Keeping the books is not dead easy,
it’s quite difficult. Make good arrangements with your parents about the money. If the
business gets into trouble, private assets can be confiscated and, since you are a minor,
they will approach your parents to cover your debts.”
(Adapted from: forum.scholieren.com)
theory
1
Read the introduction.
a W hy should you make arrangements with your parents if you are a minor and
want to start your own business?
b Why is starting your own business not so easy?
The production factors
Two boys want to start a business. They use the name ‘ADO-070’ and ask for advice
via the Internet about starting an organic food delivery service. The boys understand
that there are all kinds of legal and financial regulations to be taken into account. They
also need to make allowances for production factors such as bicycles, deliverers, a
website and a place from where the deliveries can take place. Production factors are the
means the boys need to run their delivery service (to ‘produce’). Every business needs
production factors in order to be able to produce.
There are four types of production factors: nature, labour, capital and entrepreneurship.
Nature provides, for example, (agricultural) land and (rain)water. Employees provide
labour. Products required for production such as machinery and tools are the capital
goods. These belong to the capital production factor. Capital is, therefore, a production
factor that is, in turn, produced since machinery and tools (capital goods) also have to be
made. Entrepreneurship refers to the owner of a business who combines the production
factors to produce products.
Chapter 1
Scarcity and exchange
7
knowledge & application
Section 1 You don’t get something for nothing
2
theory
3
Scarce and free goods
Businesses produce goods and services. Goods produced by businesses are tangible
products such as a loaf of bread. Services are intangible. A cinema screening, for
example, cannot be held in your hands and is, therefore, a service.
Production factors are required to make nearly all goods available. Such goods are
referred to as scarce goods. For example, to produce coffee in a restaurant, water, coffee
beans and a coffee maker are required. This means that coffee is a scarce good. Windmills
produce electricity. Electricity is a scarce good (source 1).
‘Scarce’ should not be confused with ‘rare’. Books are scarce because paper, ink, printing
presses and labour are required to make them available. But books are not rare, as
bookshops and department stores have many of them.
As the production of scarce goods requires production factors, a choice has to be made.
After all, the production factors can also be used for other purposes. The drinking water
used to make coffee could also be used to wash your hands. Neither can an employee of a
restaurant write books when he is working. Scarcity, therefore, forces us to make choices.
This is the fundamental problem in economics. A downpour is a free good. It either rains
or it does not, but no production factors are required to produce the downpour. We do not
have to consider the question: shall we produce a downpour or use the production factors
required for this to bake ten loaves of bread instead?
4
5
6
7
8
8
Which production factors are created using other production factors? Select the
right answer.
A Nature
B Labour
C Capital
D Entrepreneurship
The two boys take decisions and purchase items for their delivery service. To
which type of production factors do the examples below belong?
a The computer that is used to keep the website up-to-date.
b The boys are co-owners and determine the path the business will take.
c A classmate is hired to do the cleaning.
d The delivery bicycles that are used to transport the food.
e The land where the place to store the food is located.
Indicate if the following organisations produce a good or a service.
a Supermarket
b Insurance company
c Car manufacturer
d Publisher of school books
e Secondary school
f Manufacturer of LCD TVs
A restaurant produces a combination of goods and services. Please explain.
a According to the theory, a downpour is an example of a free good. The air we
breathe is another example of a free good. Please explain.
b Think of two other examples of a free good. Explain your choice.
c Some economists say that (clean) air in the Netherlands is not a free good
but a scarce good. Defend their opinion.
Read source 1. Explain the caption.
Explain the title of this section.
Chapter 1
Scarcity and exchange
theory
Source 1 Outdoor drying: scarce or free?
Source 2
€
€
People’s needs
People have needs. For example: the need for a relationship, sunny weather, a nice
scooter, good music and tasty tomatoes. The last three examples relate to the need for
scarce goods. Economics studies how people try to fulfil their needs with scarce goods.
That is why the need for a relationship or sunny weather does not belong to the domain of
economics. A relationship and sunny weather are free goods, not scarce goods. The task
of making a choice, which is central in economics, is irrelevant here.
Means are required to fulfil the need for scarce goods. For example, you need an income
to be able to buy a scooter. If you want to grow tomatoes, you need a vegetable garden.
The need for scarce goods is always greater than the means available (source 2). If a
clothes shop were to hand out the clothing for free, the shop would be empty within a
day. Apparently people feel the need to possess many clothes, but the means to fulfil this
need are too limited.
That is why people have to make a choice as to which needs they want to fulfil with their
limited means: do I spend € 5 on refreshments at a pavement café or on a magazine?
Consumer’s needs
9
10
Consumer’s
means
11
What are your means? Select the right answer.
A Your needs
B Your income and savings
C The products offered in shops
Henry does not have enough money to pay for a domestic help. Which means
could he use to fulfil his need for a clean house without money?
Why does your need for scarce goods require you to make choices?
Chapter 1
Scarcity and exchange
9
theory
knowledge & application
Section 1 You don’t get something for nothing
Self-sufficiency and consuming
In order to fulfil your needs as much as possible, there are two options:
-You practise self-sufficiency. This means making products yourself. For example,
baking your own bread.
-You buy products and services. When you buy products and services, you are a
consumer. A consumer consumes: he/she buys consumer products, also known as
consumables (source 3). Consumables are meant to meet the needs of consumers.
Consumables are not meant to produce other products in a business. Products that a
business uses during production are capital goods. The same product, therefore, can
be a consumable at home and a capital good in a business. An oven at your house is a
consumable but in a restaurant it is a capital good.
Consumptie
in Nederlandin the Netherlands (difference in % compared to the previous year)
Source
3 Consumption
4
3
2
1
0
–1
–2
–3
–4
2009
2010
2011
2012
2013
Source: CBS (Centraal Bureau voor de Statistiek, Statistics Netherlands)
12
13
14
10
hich of the examples below are good examples of a production factor? And
W
what type of production factor is involved?
a Oven in a restaurant
ePostman
b Oven in your home
f Water in the park’s pond
c Car used to deliver the post
gCooling water at a nuclear power
d Your mother’s car plant
h PC at the Rabobank
C BS (Centraal Bureau voor de Statistiek, Statistics Netherlands) keeps track of
the amount of euros the average Dutch consumer spends annually. Why does
this not provide a complete picture of the extent to which the consumer can
fulfil his needs?
A t the beginning of this chapter, Christine said that there was a recession. She
told her story in July 2013.
e Read source 3. Does her story fit the diagram in source 3? Explain your
answer.
bDuring which period between 2009 and 2013 did the consumption increase
in comparison with the previous year?
cThe total consumption in July 2012 in the Netherlands was € 37 billion. Use
source 3 to estimate the consumption in July 2013.
Chapter 1
Scarcity and exchange
Final assignment
15
16
17
Read source 4. Do you agree with the last sentence? Please explain.
a Read source 5. Finish the caption.
b What is scarce to the parents in this cartoon?
Read source 6. Explain how the concept of consumption in this article has a different
meaning from the one in the main text (theory).
Source 4
One T-shirt costs 2,700 litres of water
The Dutch use approximately 124 litres of water per citizen. When considering the total
usage of water other than drinking water, the Netherlands is indirectly a major consumer of
water. If you buy a T-shirt, you ‘use’ 2,700 litres of water. Cotton plants grow in hot and dry
areas. They need a lot of irrigation water that quickly evaporates. 1.1 billion people suffer
from a shortage of drinking water. To them, drinking water is a scarce good.
(Adapted from: Dag)
Source 5 These parents have an economic problem because …
Source 6
Eating nuts can be dangerous
Duyvis states on the packaging of certain nut products that the contents may contain traces
of peanuts. This is a warning for those suffering from peanut allergies. People who are not
allergic to peanuts can safely consume the products.
(Adapted from: De Morgen)
Chapter 1
Scarcity and exchange
11
knowledge & application
Section 2
intro
Choosing means losing
“Women should work more”
“Women should be more independent from their husbands. Too often they live off their
husband’s income.” This is what the Dutch Minister of Education, Culture and Science
stated a few years ago. According to her, women should be financially independent and
not just because their marriage may fail. “Many married, non-working women do not seem
to realise that if their husband’s income stops, the family will have nothing left to fall
back on.”
According to the minister, women too often do nothing with their education. The women
themselves are also to blame, she said. “Obviously it helps when child care has been
properly arranged. But women should also get rid of their eternal feeling of guilt about
their family. Rather, they should feel guilty about the fact that the government has
invested so much in them.”
(Adapted from: NRC)
Source 1
1
12
Read the introduction.
a W hy, according to the minister, should women take up paid employment
more? Provide two reasons.
bWhat can the government do to enable women to take up paid employment
more? Explain your answer.
Chapter 1
Scarcity and exchange
theory
Multi-deployable
A parent with small children can do paid work or stay at home and take care of the
children. Maize can be used for cornflakes, but also for biofuels (source 2); a car can be
used as a taxi or as a company car for a sales representative. There are many production
factors that can be used in different ways.
In economics, the fact that means can be used in different ways is referred to as
alternative use. This is a central concept in economics. Scarcity of the means forces us to
make choices. We have to assess what we rate as most important.
Every manufacturer makes assessments. Example: a baker can borrow € 10,000 from the
bank. He can spend the money on a new oven or on renovating the shop.
Every employee makes assessments. Your economics teacher can accept a teaching job
for 25 tuition hours or opt for 15 tuition hours and more free time.
Every consumer makes assessments. Will you use your € 100 to go to McDonald’s twelve
times or will you buy four books? Or will you compromise and go to McDonald’s six times
and buy two books? This assessment can be shown using a budget line (source 3). This
line includes all the combinations that are possible with a budget of € 100. Buying one
extra book means three fewer visits to McDonald’s.
2
3
4
Read source 1. Explain why this cartoon fits in with the theory.
Read source 2. Which two applications of maize are not included in the text of
source 2?
The use of maize for the production of biofuels could increase malnutrition in
developing countries. Put the statements in the correct order. Start with C.
A The demand for maize increases.
B Food prices in developing countries increase.
C More maize is used for the production of biofuels.
D Malnutrition in developing countries increases.
E The price of maize increases.
Source 2 Maize can be used in alternative ways
Maize is a versatile product. A short list of what maize can be used for: cornflakes, tortillas,
edible oil, beer, whisky, thickener in sauces, soups and porridge. And this is only a list of
foods and beverages.
Maize can also be used as a raw material for biofuels. As there is a threatening worldwide
shortage of energy, the use of maize for producing biofuels is positive. However, each kilo
of maize used for biofuels can no longer be used for something else. The same applies
to maize as to all other products for which there is great demand: the price increases.
This means that by using maize for the production of biofuels, malnutrition in developing
countries increases.
Chapter 1
Scarcity and exchange
13
knowledge & application
Section 2 Choosing means losing
5
6
number of books
Source 3 A budget line
budget line
7
8
number of visits to McDonald’s
xplain how the paper used to make this textbook can be alternatively used.
E
a Why is a budget line typical for economics?
b Read source 3. How much money is spent during a visit to McDonald’s on
average?
cHow many visits to McDonald’s have to be sacrificed in order to buy one
extra book?
dIn which direction will this budget line shift if the budget becomes € 150?
Explain your answer.
Draw a budget line for a budget of € 360 and two products, where one unit
of product X requires sacrificing four units of product Y. Indicate the prices you
used for both products in the example.
Read source 4. In situations 1 to 3 the change in the budget line is the result of
one of the following causes:
A The price of a CD has decreased.
B The price of a CD has increased.
C The price of a DVD has decreased.
D The price of a DVD has increased.
E The income has increased.
F The income has decreased.
a
W hat has caused the change in the budget line in situation 1? Explain your
answer.
b
W hat has caused the change in the budget line in situation 2? Explain your
answer.
c W hat has caused the change in the budget line in situation 3? Explain your
answer.
d
I t was specified for questions a and b that there was only one cause. The
change in situation 3 may also be the result of a combination of two of the
above causes at the same time. Which two causes?
Explain your choice.
1 a budget line
2 a budget line
3 a budget line
number of DVDs
number of DVDs
number of DVDs
Source 4
number of CDs
14
budget line
budget
line
budget
line
Chapter 1
number of CDs
Scarcity and exchange
number of CDs
theory
Establishing a budget
It is not easy to assess at a single glance whether you will have sufficient income to
pay for all expenditure during the period to come. Fixed costs are usually paid once a
month or year. For example: a subscription to a magazine and your monthly energy bill.
Non-recurring high charges, such as the purchase of a scooter, are infrequent. Daily
expenditure is regular. Examples are filling up the car and shopping at the supermarket.
By establishing a budget (budget plan) you get an overview of these charges/expenditure.
A budget is used to compare your estimated future income with the estimated
expenditure. Sources 5 and 6 provide an example of a budget.
Source 5 Estimated income of the Smith family for the coming year
Estimated income
Per
month
Per
quarter
Net salary of Edwin
€2,000
€24,000
Net salary of Nardine (who
works part-time)
€700
€8,400
Net holiday pay of Edwin
Net holiday pay of Nardine
Child benefit
Per
year
Total
per year
€1,400
€1,400
€450
€450
€525
€2,100
Total income per year
€36,350
Source 6 Estimated expenditure of the Smith family for the coming year
Estimated expenditure/
contingency reserves
Per
month
Per
quarter
Per
year
Total
per year
Daily expenses
Housekeeping money
€800
€9,600
Rent
€1,200
€14,400
TV, telephone and broadband
€60
€720
Gas, water and electricity
€200
€2,400
Fixed costs
Council tax
€1,100
€1,100
Car
€150
€1,800
Miscellaneous
€80
€960
Non-recurring high charges
Holiday
Fridge replacement
Saving for future car
replacement
€300
Total expenditure per year
Chapter 1
€2,500
€2,500
€800
€800
€3,600
€37,880
Scarcity and exchange
15
knowledge & application
TIP
Section 2 Choosing means losing
9
Use a quarter to
convert a week to
10
a month. A quarter
covers thirteen weeks
or three months.
11
ead sources 5 and 6. How can you conclude from the two sources that this is
R
a budget?
a B ased on the established budget, the Smith family fear that they will be
unable to replace their car in the future. This is why they are looking for
something they can economise on. How can you conclude that the family may
be unable to replace the car in the future from the budget?
b P rovide two reasons why it would be difficult to economise on some of the
fixed costs included in the budget.
c S elect a budget item where, according to you, the family may be able to
economise. Explain your choice.
In this assignment you will establish Alisha’s budget. She is 18 years old and
makes money from babysitting. She is expecting the following for the coming
year:
- A monthly income of € 125 from babysitting;
- Expenditure:
sweets: € 1.50 per week
mobile phone contract: € 16 per month
mobile phone call charges: € 9 per month
magazine subscription: € 120 per year
sports club subscription: € 240 per year
clothing: € 240 per year
going out: € 4.50 per week
second-hand bicycle: € 228
a A lisha spends € 1.50 per week on sweets. Show, using a calculation, that the
amount that is spent on sweets is € 6.50 per month.
b Copy the table and make an overview of all Alisha’s expenses per month.
Itemise the expenses into daily expenditure, fixed costs and non-recurring
charges. The expenditure on sweets is already included in the table.
Expected expenditure
per month
Daily expenses
Sweets
€6.50
Fixed costs
Non-recurring
high charges
Mobile phone contract
Mobile phone call
charges
Magazine subscription
Sports club
subscription
Clothing
Going out
Second-hand bicycle
Total
c W
ill Alisha’s expected income be sufficient to pay for all expected expenses?
d E xplain how Alisha will be able to afford non-recurring high charges again
next year if her income, daily expenditure and fixed costs do not change.
16
Chapter 1
Scarcity and exchange
Section 1 You don't get owt for nowt
Final assignment
12
J ohn has drawn up a budget for next year (source 7). By the end of the year,
John wants to borrow € 4,000 to buy a second-hand car. The second-hand car is
estimated to have a service life of four more years. He sees an offer on the Internet
(source 8).
a Show, through a calculation, that John’s budget does not provide the room for
borrowing € 4,000.
b
P rovide a second reason why it would be unwise to buy this car using this loan.
c
S ource 9 shows John’s budget line for sweets based on the whole year. Is he able
to buy 43 pieces of sweet Y and 105 pieces of sweet X on his budget on an annual
basis? Explain your answer using a calculation.
Source 7 John’s budget
Sweets
€
5
Football magazine subscription
€
Sports club subscription
€
240 per year
Clothing
€
240 per year
90
per week
per year
Going out
€
8
per week
Mobile phone contract
€
12
per month
Mobile phone calling costs
€
9
per month
New computer
€695
Annual income
€2,500
Source 8 Credit offer on the Internet
Credit information
Loan amount
Interest
per year
Loan
duration
Amount per
month (interest +
repayment*)
€ 4,000
8%
65 months
€ 74
* Repayment: each month John repays part of the debt.
Interest: each month John pays part of the costs of the loan.
After 65 months he has paid all costs and repaid the debt.
number of products Y
Source 9 van
John’s
budget
line for sweets
Budgetlijn
Johan
bij snoepgoed
100
price of product Y = € 2,60
200
number of products X
Chapter 1
Scarcity and exchange
17
Info & application
knowledge
& application
Section 3
intro
Exchange is beneficial for all
Who wants my iPod U2 Special Edition?
On the Dutch site ruilen.nl, Mark offers a U2 Special Edition, which is an iPod with up-todate software (source 1). In exchange he wants a newer iPod model. On the site ruilen.nl
you can offer a product and indicate what product you want in return.
No money is involved on this site.
Will Mark be able to exchange his iPod? Two conditions must be met to achieve this. First,
there must be someone who would like to have the U2 Special Edition. That should be
feasible. This person, however, must also own a newer version and be willing to exchange
it for the U2 Special Edition. What are the odds?
1
Read the introduction. Mark is looking for someone to do business with.
a W hich two requirements must this person meet to make a deal possible?
b W hat can Mark do to increase the chance that he can exchange his iPod this
way? Explain your answer.
Source 1 For exchange
For exchange: Apple IPod Video 30 GB U2 Special Edition
Email this
exchanger
View all from the
swapper
This is not all
right!
For collectors or if you just like it very much!
http://apple-history.com/images/models/ipods_video_u2.jpg
This one, but used. Software is up to date, all the buttons work as new
and there is nothing wrong with the software.
In exchange: fairly new iPod model.
theory
I want to exchange mine for an iPod with touch screen that I can use with wi-fi and that can
download apps. The internal memory need not be large. I am, therefore, not so interested in
the number of GBs, but more in the quality of an iPod of a reasonably new generation. I am
looking forward to what you have to offer!
18
Exchanging without money
The site ruilen.nl uses the concept of bartering. One product is exchanged for another.
This form of exchange is less current than it used to be. When money did not yet exist, in
days gone by, people could only barter. Bartering has a number of disadvantages.
Chapter 1
Scarcity and exchange
Section 1 You don't get owt for nowt
1 Bartering takes much time and effort.
How do you find someone who needs just what you want to get rid of and who wants
to get rid of something you would like to have? Example: a baker will have to invest
much time to exchange his loaf of bread with the butcher, fishmonger and brewer for
the required amount of sausages, fish and beer. And with each exchange, the exchange
ratio has to be determined. For instance, how many sausages is a loaf of bread worth at
the butcher’s or how many fish at the fishmonger’s? At the brewer’s the exchange ratio
between a loaf of bread and beer must be determined.
2 There is little division of labour.
In a society where only bartering takes place, many professions have a hard time or
simply do not exist. An economics teacher would have a hard time finding a baker or
butcher willing to exchange a loaf of bread or sausages for a lesson in economics.
Goods and services for which a limited number of customers are available cannot be
produced through bartering. It would be too complicated to find customers wanting a
lesson in economics and who are able to offer a product the teacher needs.
That is why in the old days the division of labour was limited. Many people did
comparable work. The baker would also raise a pig and loaves of bread were also
baked at farms.
3The economy of scale (sources 2 and 3) remains limited.
Since bartering takes time and effort, it is also difficult to sell large quantities of the
same product. It would, therefore, be of no use to start producing on a larger scale. In
an economy where people barter, the economy of scale remains limited.
2
3
4
Why did people in the past only barter?
P eople also started to exchange products such as salt at a given point in time.
Wages were paid in salt and people could pay with salt in shops. Is this also a
good example of bartering?
E xplain why a producer cannot sell large quantities of the same product when
bartering.
Source 2 Europe, production in bulk
Chapter 1
Scarcity and exchange
19
knowledge & application
Section 3 Exchange is beneficial for all
theory
Source 3 I ndirect barter makes economies of scale and a large degree of specialisation possible.
But there is also criticism regarding some forms of economy of scale.
Money
When money was introduced, indirect barter developed (source 4). The baker sells his
loaf of bread for money. The baker uses the money to buy sausages, fish and beer. Money
is the ‘lubricant’ of the exchange. As one product is exchanged for money and that money
is exchanged for another product, there is an indirect barter of products.
With the introduction of money, exchanging became much easier. With bartering, the
seller has to find a customer who is able to provide a product that the seller requires.
With indirect barter, the second condition does not apply. Finding a customer is
sufficient.
Money enabled people to specialise. The baker did not need to keep a pig any more and
only baked loaves of bread.
Money also made extensive economies of scale possible. With bartering it is impossible
to sell a large quantity of products. In exchange for money, a large quantity of products
can be sold.
Specialisation and economies of scale increased the labour productivity, i.e. the
production per person increased.
The introduction of money also made it possible for professions to develop, which
enabled the further division of labour. A teacher can sell his services to a small group
of customers in exchange of money. The money he receives can be used to purchase the
products he requires.
Thanks to the existence of money, a community can produce many more and different
goods and services (source 5).
5
6
20
T he site ruilen.nl uses the concept of bartering. Do you know any websites
where products are sold through indirect barter?
T he theory in this section contains a number of economic concepts. Indicate
which concept(s) best fit(s) the descriptions below.
a High production per business
b Cause of higher labour productivity
c Production per employee per hour
d Limiting production to a limited number of activities
e Dividing activities
f Result of specialisation
Chapter 1
Scarcity and exchange
Section 1 You don't get owt for nowt
Source 4
Record number of debit card payments
Last year, Dutch consumers used their debit cards more often than ever before to make
purchases. The number of debit card payments using Maestro and V PAY amounted to
nearly 2.5 billion, more than 8% more than two years ago. This was shown by figures from
Betaalvereniging Nederland (Dutch Payments Association), published on Friday.
Small amounts were, in particular, paid using a debit card. More than 778 million
transactions (almost …A… of the total) amounted to no more than € 10 each, which is an
increase of 110 million transactions.
(Adapted from: nu.nl - 2012)
Source 5 Indirect barter, division of labour and labour productivity are mutually stimulating.
More and simple
indirect barter
Labour productivity
rises
7
8
9
theory
10
Division of labour is
stimulated
L ook at source 2. Which two concepts discussed in this section best fit this
source? Explain your choice.
L ook at source 3. What criticism is there regarding this type of economy of
scale?
a How can you see that source 4 involves indirect barter? Explain your answer.
b What word has been left out at A?
a
Read source 5. Why is there more division of labour when indirect barter is
simple?
b
E xplain why the labour productivity increases when the division of labour
increases.
A win-win situation
Both parties profit from a voluntary exchange. Why? Simply because a voluntary exchange
only takes place when both parties benefit. Manufacturers sell their product only when
the price people pay is higher than the costs of making it. Consumers only buy the
product when it is worth more to them than the price they have to pay for it.
With an exchange, both parties benefit. That is why economists say that exchange is
profitable for all. Whether the manufacturer or the consumer benefits the most from the
exchange depends on the degree of competition. If there is much competition between
the suppliers, the consumer is in luck. Thanks to competition, the price is kept low and
consumers benefit greatly. If there is only one supplier and many buyers, the buyers
(consumers) are unlucky. Because then the price is high.
Chapter 1
Scarcity and exchange
21
knowledge & application
Section 3 Exchange is beneficial for all
11
12
13
lice wants to buy a sweater and is willing to pay € 40 at most. She sees an H&N
A
advertisement for a nice yellow one for € 29.95.
H&N wants to get at least € 25 for the sweater.
a Explain how an exchange is taking place between Alice and H&N.
b Explain how Alice benefits more from this exchange than H&N.
c Provide a possible cause for Alice benefiting more than H&N.
T hink of an example of an exchange where the seller of the product benefits
greatly because the sales price is much higher than the costs and the consumer
only has a slight benefit.
a
Read source 6. Some of the visitors are willing to pay a higher price than € 25
for the concert ticket. Think of two arguments why the organisation did not
charge a higher price for the tickets.
b
T hink of a way for the organisation to increase its revenue and still sell all
the concert tickets.
Source 6
The 500 visitors to a pop concert each pay € 25 for a ticket. Some of the visitors would have
been willing to pay a higher price than € 25. This means they benefit from the sales price of
€ 25.
The concert’s organiser could have paid the band from the revenue obtained if the sales
price of the tickets had been at least € 20. The venue will, however, also be sold out if the
price is € 25. So the organiser charges € 25.
Both the visitors and the organiser benefit from the exchange.
Final assignment
14
15
16
22
This section deals with an important concept in economics: exchanging.
a Read source 7. Do Fokke and Sukke want to regain their freedom through
bartering or indirect barter? Explain your answer.
b Read the caption of source 7. Does the word bartering (i.e. direct barter) or
indirect barter fit at A? Explain your answer.
c Does the word much or little fit at B?
a Read source 8. What price will the fans pay for the ticket? Explain your answer
using a calculation.
b How many fans benefit from this price?
c T he costs for the singer are € 10,000 per concert. He is paid half the revenue from
the sale of the tickets. His benefit lies in the difference between the revenue
and his costs. Show, using a calculation, how the singer also benefits from this
concert.
d T he theatre is contemplating dividing the venue into two price categories. The
best seats would be sold for € 50 per ticket and the other half for € 40 a ticket.
Explain how the theatre still could be sold out if these prices were applied.
e Is dividing the venue into two price categories beneficial to the consumer or the
singer? Explain your answer.
Read source 9. What criticism is expressed by this cartoon? Use a concept explained
in this section in your answer.
Chapter 1
Scarcity and exchange
Section 1 You don't get owt for nowt
Source 7 The communications consultant profession only exists in an economy
with ...A… trade and …B… division of labour.
Source 8
A singer is going to perform in the theatre on Saturday evening. The theatre has
800 seats. All seats are the same price. The 1,200 fans wanting to go to the concert can be
subdivided as follows:
200 fans are willing to pay € 20 for a ticket at most.
200 fans are willing to pay € 30 for a ticket at most.
200 fans are willing to pay € 40 for a ticket at most.
200 fans are willing to pay € 50 for a ticket at most.
100 fans are willing to pay € 60 for a ticket at most.
100 fans are willing to pay € 70 for a ticket at most.
200 fans are willing to pay € 80 for a ticket at most.
The organisation opts for a sales price that ensures the theatre is full.
Source 9
Chapter 1
Scarcity and exchange
23
knowledge
Info & application
& application
Section 4
intro
The value of money
A new king, a new coin
30 April 2013. A memorable day. After 123 years the Netherlands has a king again. A good
opportunity for creating a commemorative coin. The obverse (the side of a coin bearing
the head) of the Dutch 2 euro coin shows two portraits: that of Beatrix, queen of the
Netherlands until 30 April 2013, and that of Willem-Alexander, king of the Netherlands as
of 30 April.
The double portrait coin is legal tender and 20 million of them were minted. A limited
number of the coins can also be purchased from the Koninklijke Nederlandse Munt (KNM,
Royal Dutch Mint) in BU (Brilliant Uncirculated) quality. BU is a slightly better quality and
such coins are minted using better coin blanks. The stamps are submitted to a special
treatment to ensure the design looks better. The BU version costs € 10.
theory
1
The value of money
The introduction of money made indirect barter possible and, as a result, exchanging
became much easier. Thanks to money, division of labour is possible to a large extent and
many types of goods and services can be exchanged.
Money has to meet a number of criteria. It must be divisible (coins and banknotes with
different value), transportable and non-perishable. The material value (intrinsic value)
of money must not be higher than the value printed on it (nominal value). If a coin with a
nominal value of € 2 were to have an intrinsic value of € 10, no one would use this coin to
make a € 2 purchase in the supermarket.
Besides the intrinsic and nominal values, money has two more values:
- The internal value of money: the number of products and services you can purchase
with a euro in your own country.
- The external value of money: the amount of foreign currency you can purchase with a
euro.
2
3
24
a Read the introduction. How can you conclude that the double portrait coin
can be used to pay in shops?
b Do you think the double portrait coin in BU quality is used as a coin in
circulation (used in everyday transactions)? Explain your answer.
Which statement is correct in relation to the double portrait coin in BU quality of
2013?
A The nominal value is higher than the internal value.
B The nominal value is higher than the intrinsic value.
C The intrinsic value is higher than the internal value.
D The intrinsic value is higher than the nominal value.
Read sources 1A to D. Specify which of the four values of money best describes
each part (A-D).
Chapter 1
Scarcity and exchange
Section 1 You don't get owt for nowt
Source 1 Four values of money.
A
Coin
Weight
Material
€2
8.50 g
Core: nickel/brass, edge: copper/nickel
€ 0.50
7.80 g
Nordic gold
€ 0.01
2.30 g
Copper-plated steel
number of dollars per euro
de eurorate
BWisselkoers
The euro van
exchange
1.400
1.350
1.300
1.250
1.200
C
apr 2012
oct 2012
apr 2013
Prices in euro-zone up by 1.7%
In the last month, the prices in the eurozone have increased by 1.7%. The prices of food,
alcohol and tobacco are increasing the most.
(Adapted from: de Volkskrant.nl, 3 April 2013)
D
Ever more new banknotes
Some years ago, the money system in Zimbabwe went out of control. Ever more banknotes
had to be introduced. The highest amount printed on a Zimbabwean dollar banknote was
100 trillion dollar (100,000,000,000,000 dollar). Later, ten zeros were deleted. But a few
months later the problem reoccurred. Again new banknotes had to be introduced. This time
200 million and 500 million dollar notes.
(Adapted from: NOS.nl)
4
TIP
If you find it hard to
make calculations with
percentages, then do
the additional exercises
in section 6 of
this chapter.
5
a R
ead source 1. How many dollars could be purchased with one euro in April
2013?
b How many euros could be purchased with one dollar in April 2013?
c W hat happens to the euro’s external value of money when the dollar’s
exchange rate increases? Explain your answer.
d W hat happens to the euro’s internal value of money when the prices in the
shops increase? Explain your answer.
P rices in the Dutch shops increased by a total of 10% during the 2008-2013
period. To calculate the percentage that the euro’s internal value of money has
dropped during this period you can use the following mnemonic. In 2008 you
had € 100. The products cost € 1 on average. This means that with € 100 you
could purchase € 100 : € 1 = 100 products.
Chapter 1
Scarcity and exchange
25
knowledge & application
Section 4 The value of money
Copy the following sentences and fill in the missing information at the letters A,
B and C.
theory
I n 2013 you had € 100. The products cost on average € ... (A). This means
you could purchase € 100: € … (A) = ... (B) products.
Conclusion: with the same amount of money you could purchase ... (C) %
fewer products. This is the percentage decrease of the euro’s internal
value.
Money equals confidence
The intrinsic value of modern money is low. In the past this was different. Coins used
to have a high and fixed value, for example due to the quantity of gold in the coins. A
banknote could be exchanged at the bank for a fixed quantity of gold. This meant that
people had a solid reason for having confidence in money.
This is no longer the case with current coins and banknotes. There is now only one reason
why a student is willing to work hard at a supermarket in exchange for a few banknotes.
Or why a hotel accepts money in exchange for a two-week stay with breakfast and dinner.
The student and the hotel are confident that they, in turn, can use the money to purchase
valuable products and services. Modern money is based on confidence. Modern money is
fiat money. When confidence in money fails, the economy switches to bartering again.
6
7
8
In the past, coins had a high intrinsic value.
a W hy was the intrinsic value of old coins higher than the intrinsic value of
modern coins?
b W hy did people in the past have confidence in the value of a banknote?
c What is confidence in modern money based on?
We use coins, banknotes and electronic money (in a bank account) as money.
But in the past, more products were used as generally accepted means of
exchange. Gold for example, because it is divisible, transportable and nonperishable.
Could the following products also have been used as money?
a fishb living cowsc pepper
a Read source 2. The article includes the word ‘confidence’. What does this
word mean within this context?
b Why do the people in Zimbabwe have no confidence in money any more?
c T hey switched to barter. Explain why an economy based on barter has
trouble meeting the needs of its population.
Source 2
Zimbabwe switches to a barter system
80 billion Zimbabwean dollars for a loaf of white bread and 10 billion for an egg. Under
President Mugabe, the country suffered from huge price increases: hyperinflation. A cup
of coffee (30,000,000,000) and a cheeseburger (75,000,000,000) cost 105,000,000,000
Zimbabwean dollars.
People carried large bundles of banknotes, the value of which evaporated instantly. They
had no fiduciary confidence in money any more. In daily life, the official economy was
largely replaced by an informal economy where people exchanged products for other items.
(Adapted from: Trouw.nl)
26
Chapter 1
Scarcity and exchange
theory
Section 1 You don't get owt for nowt
The functions of money
Money has three functions:
1An exchange function (making purchases). A shopkeeper exchanges his products with
you for money. The shopkeeper uses the money to purchase products and pay for other
expenses. Money makes indirect barter possible.
2A calculation function. In section 2 you could calculate exactly how many visits to
McDonald’s were worth one book. The prices of products allow you to compare the
values of different products.
3A hoarding function (i.e. saving). When money did not yet exist, rich people had, for
example, many cows or much land. When money was introduced, people could express
their capital in terms of money.
9
theory
10
Which function(s) of money is (are) included in the following examples?
a Yusuf deposits € 120 in a savings account.
b A copy of de Volkskrant, a Dutch newspaper, is as expensive as eight syrup
waffles.
c James uses a € 50 banknote to buy two shirts.
Imagine the following situation: The Dutch economy does not use money. The
shop windows display the following products and prices:
- Price of a pair of shoes = 30 loaves
- Price of a scooter = 30 pairs of shoes
- Price of a sausage = ½ a loaf.
a P aul wants to buy a scooter. He is a butcher’s son and has sausages that
can be used as a means of exchange. How many sausages does he pay for a
scooter when the above exchange ratios are applied?
bWhich disadvantage of bartering can be concluded from the answer to
question 10a?
cHow does the introduction of money as a means of calculation simplify the
sum for Paul?
dHow does the introduction of money as a means of exchange facilitate Paul’s
purchase?
Types of money
There are two types of money:
1 Notes and coins: tangible money.
2 Scriptural money: invisible money, money deposited in current accounts.
Scriptural money can be utilised by:
- Using a debit card to pay via a payment terminal in the shop;
- Using a debit card to withdraw money from a cash machine or what is commonly known
as an automated teller machine (ATM);
-Filling in a transfer form at home to transfer money from your own account to another
person’s account;
-Filling in a giro collection form;
-Using a credit card where the credit card company lends you the money spent with the
card and you pay the amounts back at the end of the month;
-Transferring money using the computer, for example, via online banking; paying web
shops using iDEAL, PayPal, a credit card or paying after receiving an invoice;
-Transferring money by telephone.
Chapter 1
Scarcity and exchange
27
knowledge & application
Section 4 The value of money
11
12
I saac used his debit card to withdraw € 25 from an ATM. This means that his
quantity of:
notes and coins scriptural money
A decreaseddecreased
B increasedincreased
C increaseddecreased
D increasedincreased
W hich means are (most) suitable in the following examples? Select from:
notes and coins, debit card, transfer form, giro collection form, credit card,
online banking, transferring money by telephone.
a Paying for the purchase of a computer in a shop.
b Paying your monthly gas bill.
c Withdrawing money from your current account.
d Paying in a restaurant abroad.
Final assignment
13
a Read source 3. To which money function did the e-wallet or e-purse belong?
b M oney on an e-purse was half notes and coins and half scriptural money.
Explain what money on the e-purse had in common with notes and coins.
c Explain what money on the e-purse had in common with scriptural money.
d Which argument is given in source 3 for the e-purse becoming redundant?
e Read source 4. Check whether this argument applied to the 2011-2012 period.
Source 3
E-purse payment system to end
After 1 January 2015, the e-purse can no longer be used. The e-purse was an ‘electronic
wallet’. You could add money to it by transferring it from your current account. It was useful
for paying small amounts in shops without having to enter a PIN. However, an ever larger
percentage of debit card payments also concern small amounts and, therefore, the e-purse
became redundant.
(Adapted from: chipknip.nl, 2012)
aantal dollars per euro
Pinbetalingen
in Nederland
(per bedragreeks/in
miljoenen)
Source 4 Debit
card payments
in the Netherlands
(per amount range/in millions)
800
700
600
500
400
300
200
100
0
< 10 euro
2009
28
from 10 to
20 euro
2010
from 20 to
30 euro
2011
Chapter 1
from 30 to
40 euro
from 40 to
50 euro
2012
Scarcity and exchange
from 50 to
100 euro
> 100 euro
understanding
Understanding ...
Section 5
Understanding ...
scarcity and exchange
Choosing means losing
1
aExplain the title ‘Choosing means losing’. Use the concept of ‘alternative use’.
b C alculate the cost of a 300 km car drive when the petrol price is € 1.80. Assume
the car drives 13 km to the litre.
cOne kg of steak costs € 25. How many kg of steak must you sacrifice to drive 300
km by car?
dRead source 1. Bertil Moldén explains that his children miss out on one kg of
steak if they opt for the car drive. How come Bertil’s calculation resulted in a
different ratio than your answer to question 1c?
e Why do most consumers think differently from Bertil?
fThe government wants to reduce CO 2 emissions. What can the government do to
make people think like Bertil Moldén? Explain your answer.
Source 1
A steak or a day at the beach?
“If you know that in order to produce 1 kg of beef approximately the same amount of CO 2
emissions is produced as when driving 300 km by car, I ask my children: what do you want
to do this weekend? Stay at home and eat beef or drive to the beach?”
“This is the type of choice that we will have to make more and more in future,” says Bertil
Moldén of the Swedish Automobile Federation BIL.
(Adapted from: hln.be)
Source 2
Is Sunday opening profitable?
Retailers who are regularly open on Sundays will easily achieve 20% of their weekly revenue
on a Sunday when they are open. In other words: 20% of what customers spend they spend
on Sunday. This is a large percentage, but do people not just visit shops that are not open
on Sundays on another day of the week?
“No, that is not how it works,” says Sjoerd Veenstra, a retail expert. “People who shop on
Sundays are looking for a day of fun while shopping. If they cannot go shopping, they will do
something else. You lose the money they would have spent.”
According to a survey into opening hours on Sundays, shops require more staff on these
Sundays. However, a staff member’s average labour productivity is decreased by working
on a Sunday.
(Adapted from: z24.nl)
2
a Read source 2. Why is this topic part of the economics domain?
b D efend the opinion that opening shops on Sundays better fulfils a need than
longer opening hours on weekdays.
Chapter 1
Scarcity and exchange
29
understanding ...
Section 5 Understanding ... scarcity and exchange
cSjoerd Veenstra states that opening shops on Sundays does not affect the
number of shoppers on other days. How can you conclude from source 2 that
some of the people shopping on Sundays would do their shopping on another day
if shops were not open on Sundays?
Money equals confidence
3
aRead source 3. Are the ‘borgs’ in the local exchange trading system used as notes
and coins or as scriptural money? Explain your answer.
b M oney has three functions and so do the ‘borgs’ in Omer’s local exchange trading
system. Explain the operation of the three functions in his local exchange trading
system.
cExplain how the functions of the ‘borg’ system are less effective than those of
the euro.
4 Below are two statements from this chapter’s theory:
1 Modern money is based on confidence.
2When confidence in money fails, the economy switches to bartering again.
a Use sources 4 to 9. Select three sources that show that the first statement is
correct. Explain per source why it fits the statement.
bSelect a source that shows that the second statement is correct. Explain your
choice.
cSelect two sources that show that the second statement is not always correct.
Explain your choice.
Source 3
Omer is a member of a local exchange trading system. He explains how this system works.
Omer: “I am quite handy, even if I say so myself. I am a postman, but I do not earn much. I
would like to have more money. Then one day my neighbour said: ‘Why don’t you become a
member of the neighbourhood local exchange trading system. That way you can generate
more income. Not in euros but in ‘borgs’ since our neighbourhood is called Wildenborg.’
Last week I repaired the scooter of a young man who lives opposite us. After some
bargaining we agreed on the price: 30 ‘borgs’. I spent those, with an additional 20 ‘borgs’,
on a second-hand bicycle. Our neighbour Ms De Wit keeps track of the payments. She only
lives down the street. She keeps track of everything.”
Source 4
Banking crisis in Europe
Europe has been experiencing an economic crisis since 2008. It started with the banks.
Many banks lost billions of euros because they used their clients’ savings with poor
judgment. For example: Spanish banks used their clients’ savings to buy Spanish houses.
But the prices of Spanish houses collapsed. Without the help of the Spanish government,
the savers would have lost their money.
In Cyprus, savers were less fortunate. Banks went bankrupt and (rich) savers lost millions of
euros.
In the Netherlands, ABN AMRO and SNS Bank had to be rescued. The savings of the clients
of these banks were rescued.
As a result, many banks cannot operate properly because they lose too much money due to
frightened clients withdrawing their savings.
30
Chapter 1
Scarcity and exchange
Source 5
At certain times, people in one or more countries have lost, or may lose their confidence in
money. One of the best-known examples is Germany between 1918 and 1923. The German
currency was the mark. Let us use the price of an egg as an example. In 1914, an egg cost
0.08 mark. In 1918, the price of an egg had increased to 0.25 mark. In 1922, the price had
increased to 180 mark, in the summer of 1923 to 5,000 mark and three months later to 80
billion mark! It was logical for the Germans not to have confidence in their money any more.
They switched to old-fashioned barter.
Source 6 C
hildren playing with banknotes that have no value any more due to inflation. Weimar
Republic (Germany).
Source 7
Chapter 1
Scarcity and exchange
31
understanding ...
Section 5 Understanding ... scarcity and exchange
Source 8
Crisis in Argentina
In 2002, the Argentinean economy suffered a serious crisis. Argentinean money no longer
worked as a means of exchange. Many Argentineans became unemployed.
Victor Hernández did not think he would be able to find a job. Then he became a member
of the Club de Trueque local exchange system. He could now offer his services as an
electrician to the members of the local exchange trading system. In exchange he receives
‘créditos’ (credits). He can use these ‘créditos’ to buy goods and services from other
members of the system.
Source 9
Omer: “Our local exchange trading system became ever more popular after 2008. This was
due to the crisis. However, I am not sure if I will stay with the system. I keep track of the
amount of ‘borgs’ I have in my account. I believe that I had 1,200 ‘borgs’ on 1 September.
But according to Ms De Wit I have 760 ‘borgs’ in my account. I find this strange. She recently
had work done on her garden. But I cannot believe she did that with my money. She seems
so reliable. Still, I have some doubt ...”
Ajax’s budget
5
32
Not
only consumers but also associations, clubs and businesses often draw up a
budget.Source 10 lists six clubs from professional football with the highest
budgets in the Dutch premier league for the 2012-2013 season.
Ajax calculated how much money the club had received (the revenue, source 11)
and how high the costs were that had been incurred (source 12) once the 2011-1012
season had finished.
Source 11 shows that the revenue depended considerably on the revenue from
the media. The media revenue strongly depends on the clubs making it to the
Champions League where the best European teams compete. Clubs participating in
the Champions League receive a great deal of money. This revenue can be quite high
when a club is successful in the Champions League.
a Why are sources 11 and 12 not good examples of a budget?
b The following usually applies to a proper budget:
- The budgeted revenue is higher than or equal to the budgeted costs.
-The chance of setbacks, resulting in debts, is small.
Hans is an Ajax supporter. He states: “It is quite hard for Ajax to draw up a proper
budget because:
1If Ajax tries not to spend too much, the club will probably not become a
champion.
2If Ajax spends too much money, the club could get into deep debt.”
Defend statement 1 using a source.
c Defend statement 2 using the sources.
Chapter 1
Scarcity and exchange
Source 10
Club
2012-2013 budget in
millions of euros
2006-2012 champion
Ajax
€ 62
2011, 2012, 2013
PSV
€ 60
2006, 2007, 2008
FC Twente
€ 46
2010
Feyenoord
€ 37
–
Vitesse
€ 28
–
AZ
€ 28
2009
(Source: catenaccio.nl)
1,000
Source 11 Ajax’s revenue over seven seasons
Omzet van Ajax in zeven seizoenen
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
2011-2012
stadium
29,683
29,703
26,891
28,915
29,806
39,101
36,291
commercial
24,752
24,878
24,357
31,449
31,772
38,135
38,296
media
18,965
9,275
8,515
6,004
6,817
19,345
28,024
other
1,030
1,035
2,129
786
718
1,107
1,512
1,000
Source 12 Ajax’s costs over seven seasons
Kosten van Ajax in zeven seizoenen
60,000
50,000
40,000
30,000
20,000
10,000
0
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
2011-2012
wages
36,234
35,510
45,161
42,943
48,476
51,323
45,001
depreciation charges
12,238
13,105
22,676
18,263
19,667
20,722
19,008
operating costs
31,196
30,796
31,985
37,182
33,794
43,955
46,068
Chapter 1
Scarcity and exchange
33
economic skills
Economic skills
Section 6
theory
intro
Percentage calculations
In this section we focus on calculating and other economic skills that are important in the
economics domain.
This section deals with percentage calculations. Percentages are used in everyday life
and are certainly used in economics. Percentage calculations are included in all the
chapters of this book. This is why you will practise percentage calculations in this first
skill practice section.
The usefulness of percentages
In 2015, Simon’s wages will increase by € 32 per month when compared to 2014. Is this a
large increase? That depends on his wages in 2014. If Simon earned € 160 per month in
2014, an extra € 32 is quite a large increase. If he earned € 3,200 in 2014, the increase is
relatively small.
When expressing the wage increase in percentages, the increase becomes clearer. In the
first example, he earns € 32 : € 160 × 100% = 20% additional pay. In the second example,
he only earns € 32 : € 3,200 × 100% = 1% additional pay.
A percentage change indicates the relative change, the change in comparison with the old
situation. Percentages are based on 100. If Simon gets 20% more money, he will receive
an additional € 20 per € 100 in wages.
A percentage comparison
Percentage calculations can also be used to compare Simon’s wages with those of others.
In 2014, Simon will earn € 80 per month less than Alice. Is that a significant difference?
If Simon earns € 160, Alice earns € 240. That means that Simon earns € 80 : € 240 ×
100% = 33.3% less. If Simon earns € 3,200, Alice earns € 3,280. In that case, Simon
earns € 80 : € 3,280 × 100% = 2.4% less.
Therefore, percentages are also useful for making relative comparisons between figures.
Source 1
Calculating a percentage change:
absolute change : ‘old’ amount x 100%
An example:
Halil used to earn € 120 per month. He now earns € 132 per month.
How much more does Halil now earn as a percentage?
The absolute change is € 132 – € 120 = € 12. The ‘old’ amount is € 120.
This means the percentage increase is € 12 : € 120 × 100% = 10%.
1
34
Work out the following calculations using source 1.
a G erard earned € 70 per week and is subsequently given a wage increase of
€ 7. Calculate the percentage increase of his income.
bAziz earned € 820 per month and now earns € 850. Calculate the percentage
increase of his income.
cFatima earned € 340 per week. She is going to work fewer hours and will now
earn € 280 per week. Calculate the percentage decrease of her income.
Chapter 1
Scarcity and exchange
d O
lav has been given an € 80 raise and now earns € 400 per month. Calculate
the percentage increase of his income.
Source 2
Calculating an absolute change:
‘old’ amount : 100 × percentage change = absolute change
An example:
Halil earns € 200. He is given a 6% raise. How many additional euros will Halil earn?
The ‘old’ amount is € 200. Therefore: € 200 : 100 × 6 = € 12 raise.
2
Work out the following calculations using source 2.
a Yolanda is given a 3% raise. She used to earn € 2,100 per month. Calculate
her wage increase in euros.
bJohn is given a 2.4% raise. He used to earn € 20,400 per year. Calculate his
wage increase in euros.
cLast year, consumers spent € 120 billion on goods and services. This year
consumption has increased by 4.1%. Calculate the amount in euros that
consumers spend on goods and services this year.
Source 3
Calculating part of the total using percentages:
the total amount × percentage : 100
An example:
Simon earns 60% of Halil’s wages. Halil earns € 180 per month. What does Simon earn per
month?
The total amount is € 180. Therefore: € 180 × 60 : 100 = € 108.
3
Work out the following calculations using source 3.
a T he Netherlands produces € 600 billion in goods and services; 60% are
export products. Calculate the value of this export in euros.
bThe Netherlands has a population of 16 million; 25% are younger than 20.
Calculate the number of people who are younger than 20.
Source 4
Making a percentage comparison:
the difference : the amount used for comparison × 100
An example:
Theo earns € 25 a week, Frits earns € 22.50. Theo earns what percentage more than Frits?
The difference is € 2.50. The amount used for comparison is Frits’ income; i.e.:
€ 2.50 : € 22.50 × 100 = 11.1%.
4
ork out the following calculations using source 4. Calculate to one decimal
W
place.
a C harles spends € 22 per week on his mobile phone while Peter spends € 11.
What percentage does Charles spend more on his mobile phone than Peter?
bCharles spends € 22 per week on his mobile phone while Peter spends € 11.
What percentage does Peter spend less on the mobile phone than Charles?
cRebecca earns € 34 per week. Karin earns € 38 per week. How much less
does Rebecca earn when compared to Karin expressed as a percentage?
Chapter 1
Scarcity and exchange
35
economic skills
skills
Economic
Section 6 Percentage calculations
5
Work out the following calculations using sources 1 to 4.
a Gilbert earns € 1,400 and gets an € 80 raise. Calculate the percentage
increase of his income.
bMustafa was paid € 7.20 per hour. His hourly wage rises to € 7.45.
Henry’s hourly wage increases from € 3.30 to € 3.40. Who gets
the biggest raise as a percentage?
cRik earned € 750 per month. He is given a 5% raise. What is his new monthly
income? Procentuele verandering van het totale inkomen en
dPaula earned
€ 2,312
per month
2.12% raise. What is her new
de totale
consumptie
van and
2008gets
naara2012
monthly income?
5
Procentuele verandering van het totale inkomen en
de
totale 5consumptie
42008ofnaar
Source
Percentagevan
change
total2012
income and total consumption from 2008 to 2012
5
3
4
2
3
1
2
0
1
–1
0
Netherlands
–1
–2
Belgium
–3
–2
–4
–3
–5
Netherlands
Belgium
Germany
consumption
–4
Germany
income
–5
consumption
income Eurostat, National Bank of Belgium, DESU)
(Source:
Statistics Netherlands,
theory
6
aRead source 5. How can consumption in Germany and Belgium grow more
strongly than income in terms of percentages?
b In 2012, total consumption in the Netherlands was worth € 440 billion.
cWhy does Statistics Netherlands indicate the change in consumption and
income in source 5 in percentages and not in euros?
Percentage points
Percentage points are used when the two figures used to make calculations are
also percentages. Example: last year, 80% of consumers did their shopping at large
supermarkets. This has now risen to 84%. The increase is, therefore, 4 out of 80 =
4 : 80 × 100 = 5%. You could also say: the increase is 84 – 80 = 4 percentage points.
Source 6
‘Rabo internetsparen’ interest for savers plummets to 1.5%
That saving will not make you a fortune is widely recognised, but it is getting even worse.
As of next week, the Rabobank will give an annual interest of 1.5%. Over a year ago, the
Rabobank paid almost one percent interest more. At that time, the Rabo gave ...% on
savings.
(Adapted from: rtl.nl)
7
36
Use source 6. Which percentage has been left out in the source?
Chapter 1
Scarcity and exchange
terminology & summary
Fixed costs
Unavoidable, regularly recurring expenses.
Non-recurring (high) charges
(Large) expenses that only occur occasionally.
Terminology
Section 1
Capital (goods)
Goods that are used in a production process.
Consumables
Products and services that fulfil the needs of
consumers.
Consumer
Someone who buys products and services.
Economics
Economics studies how people try to fulfil their
needs through scarce goods.
Entrepreneurship
Combining the nature, labour and capital good
factors during production.
Free good
A good that is not scarce.
Labour
The mental and physical work of the people
involved in the production process.
Means
Items through which needs can be fulfilled.
Nature
Everything nature can offer for production.
Needs
People’s wishes.
Production factors
Types of production factors are: labour, nature,
capital and entrepreneurship.
Scarce good
A good for which production factors must be used
to obtain it.
Self-sufficiency
Making products yourself.
Section 2
Alternative use
Means can be used in various ways.
Budget (budget plan)
Overview of the expected income and expenses.
Budget line
A line that indicates the available spending
options with a specific budget.
Daily expenses (daily expenditure)
Regularly recurring expenses that are paid from
the household budget.
Chapter 1
Section 3
Barter
Exchanging products.
Division of labour
Dividing tasks among individuals.
Economy of scale
A business can and starts to manufacture more
products.
Indirect barter
Selling a product for money.
Labour productivity
The number of items an employee can produce
within a specific time period.
Specialisation
Focusing on a limited number of activities.
Section 4
Credit card
Card used to make purchases on credit.
Debit card
A means of using scriptural money.
External value of money (of a euro)
The amount of foreign currency you can purchase
with a euro.
Fiat money
The value of money is based on confidence.
Giro collection form
A payment form that is used to pay a bill.
Internal value of money (of a euro)
The number of goods and services you can
purchase with a euro in your own country.
Intrinsic value of money
The material value of money.
Money
A generally accepted means of exchange.
Nominal value of money
The value indicated on notes and coins.
Notes and coins
Tangible money.
Online banking
Paying via the Internet.
Scriptural money
Money deposited in bank and giro accounts.
Scarcity and exchange
37
terminology & summary
Purchases can be classified into three categories:
- Fixed costs.
- Non-recurring high charges.
- Daily expenses.
A budget (budget plan) can be used to determine if
you can manage on the money that you have.
Transfer form
A way of transferring money from your own
account to another account.
Section 6
Percentage point
The absolute difference between two percentage
figures.
Summary
There are four types of production factors:
Production factor
Examples
Nature
Air, water and land
Labour
Employees
Capital
Machinery, tools and
premises
Entrepreneurship
Owner who combines
the production factors
Virtually all goods are scarce as nearly always
production factors must be used to obtain
those goods. With free goods there is no choice
involved. It either rains or it does not, but no
production factors are required to produce the
downpour.
Economics studies how people try to fulfil their
needs with scarce goods. Means are required to
fulfil these needs. In economics, the fact that
means can be used in different ways is referred
to as ‘alternative use’. This is a central concept in
economics.
Bartering is not useful in this day and age because:
- Bartering takes much time and effort.
- There is little division of labour.
- Economy of scale remains limited.
Money has four values:
-The intrinsic value (material value) of money;
must not be higher than the nominal value.
-The nominal value (the value that is indicated
on the money).
-The internal value of money (the number of
products and services you can purchase with a
euro in your own country).
-The external value of money (the amount of
foreign currency you can purchase with a euro).
Modern money is based on confidence. Modern
money is fiat money.
Money has three functions:
- An exchange function (making purchases).
-A calculation function (making euro
calculations).
- A hoarding function (saving).
There are two types of money:
-Notes and coins: tangible money.
-Scriptural money: invisible money, money
deposited in current accounts.
In order to fulfil your needs as much as possible,
there are two options:
-You practise self-sufficiency. This means
making products yourself. For example, baking
your own bread.
-You buy products and services. Buying products
and services makes you a consumer.
You use money to buy products and services. This
is referred to as ‘indirect barter’.
38
Chapter 1
Scarcity and exchange
Index
A
Cost price
Added value
271, 243
37, 13
Alternative use
183, 165
Costs per product unit
149, 129
Export
183, 152
183, 153
121, 104
External effects
183, 159
Current assets
121, 102
External value of money (of a euro)
Cyclical and structural policy
271, 259
Assets
121, 102
Creditors
94, 80
37, 27
Export ratio
Credit card
149, 133
67, 51
Excise duty
211, 200
Automation
Excess supply
183, 165
Annuity insurance
Association
67, 46
Cost-price increasing tax
37, 24
F
D
B
Balance sheet
121, 102
Balance sheet change
121, 115
37, 18
Barter
Fiat money
Daily expenses (daily expenditure)
Debit card
Debt capital
Basic innovation
211, 195
Debtors
Book value
150, 147
Deductible (insurance excess,
Boom
271, 256
own risk)
Box system
184, 178
Demand curve
Bracket rate
184, 179
Brand advertising
Break-even sales
Break-even turnover
Financing plan (funding plan)
37, 27
Fixed assets
121, 99
Fixed costs
121, 102
Fixed costs
67, 46
Foundation
94, 80
240, 224
Free good
183, 169
Freelancer
94, 73
149, 140
Depreciation
150, 146
Fully funded system
149, 127
Depreciation charges
149, 127
Depression
37, 15
Division of labour
121, 98
Funding plan
37, 19
211, 203
GDP
ECB (European Central Bank)
271, 261
onder firma, vof)
E-commerce
149, 138
Giro collection form
Economic growth
271, 245
Goods in stock
94, 71
Business plan
Economics
C
Economies of scale
37, 9
183, 154
183, 170
Economy of scale
Capacity utilisation rate
271, 259
Employee insurance scheme
240, 228
37, 19
Gross domestic product (GDP)
183, 153
Gross profit
121, 98
Gross wages
149, 131
37, 7
Employee insurance schemes
149, 131
37, 7
Employer
149, 131
H
Employer’s contributions
149, 131
Heterogeneous product
Employment (level)
271, 256
Homogeneous product
Human capital
Chamber of Commerce
94, 71
EMU
211, 203
Checking
94, 81
EMU debt
211, 203
EMU deficit
211, 203
Collective agreement (CA, collectieve
arbeidsovereenkomst, cao)
183, 170
Entrepreneur
Collective goods (public goods)
183, 166
Entrepreneurship
94, 80
Commitment
240, 215
Competition
67, 55
149, 133
Equalisation (of incomes)
94, 73
37, 7
271, 252
37, 27
121, 97
183, 162
Capital goods
67, 55
94, 77
Government (overheid)
Capital
183, 162
183, 153
General partnership (vennootschap
CA (collective agreement)
Cartel
121, 99
G
E
271, 259
211, 199
271, 254
37, 15
Competitiveness
37, 8
Demand for labour
37, 13
Commercial organisation
37, 15
240, 217
Budget plan
Central government (het rijk)
121, 102
Free riding
Budget line
Business cycle
37, 26
121, 99
67, 40
Budget
Budget deficit
37, 15
67, 56
67, 57
211, 186
I
Import
183, 152
Import duties
183, 154
Import ratio
183, 153
Equilibrium price
67, 50
Income
Equilibrium quantity
67, 50
Income statement
121, 106
Index
211, 190
Equity
121, 99
Consumables
37, 10
EMU (European Monetary Union)
211, 203
Indirect barter
Consumer
37, 10
EU (European Union)
183, 154
Inflation
67, 43
37, 20
211, 189
Consumer confidence
271, 254
European Central Bank (ECB)
271, 261
Innovation
211, 193
Consumer price
149, 126
European Monetary Union (EMU)
211, 203
Insurance
240, 221
Consumer price index
271, 267
European Union (EU)
183, 154
Insurance excess
240, 224
Insurance premium tax
240, 237
Cost of sales
121, 98
Excess demand
67, 50
273
Insured value
240, 222
Intangible loss
240, 222
No-claims bonus (in relation to car
insurance)
Public limited company (naamloze
240, 224
94, 78
Interest
211, 187
Nominal interest rate
Public sector (collectieve sector)
183, 162
Internal market
183, 154
Nominal value of money
37, 24
Purchase value
150, 147
37, 24
Non-commercial organisation
94, 80
Purchasing power (of the income)
183, 155
Non-equalisation (of incomes)
271, 252
Internal value of money (of a euro)
International division of labour
Intrinsic value of money
Investing
Investment budget
37, 24
211, 202
211, 189
37, 15
Q
Notes and coins
37, 27
Quantity demanded
67, 40
Quantity offered
67, 47
Quantity supplied (quantity offered)
67, 47
121, 97
Oligopoly
67, 55
37, 7
Online banking
37, 27
Labour productivity
37, 20
Open economy
183, 153
Legal entity
94, 75
Operating costs
121, 98
Operating result
149, 124
L
Labour
Liabilities
121, 102
Limited company (besloten
R&D
211, 193
Real interest rate
211, 189
Recession
271, 254
94, 80
Research & Development
211, 193
94, 83
Residual value
150, 147
94, 81
Return on investment
211, 193
94, 78
Organisational chart
Line organisation
94, 83
Organising
Line-staff organisation
94, 83
Own risk
240, 224
121, 102
Local authorities (lagere overheden)183, 162
R
Organisation
vennootschap)
Liquid assets
S
P
Sales
211, 198
Lorenz curve
271, 250
Pay-as-you-go system
Loss
149, 124
People policy
149, 140
Scriptural money
Per mille
240, 236
Secondary incomes
Scarce good
Percentage point
38, 36
Manager
94, 81
Perfect competition
67, 57
Managing
94, 81
Place policy
Market equilibrium
67, 50
Planning
Market mechanism
67, 51
Policy fee
240, 237
Share
Skewed distribution of income
M
67, 43
Non-recurring (high) charges
O
149, 138
94, 81
67, 45
37, 8
37, 27
271, 252
Self-employed person without
employees
94, 73
Self-sufficiency
37, 10
Service life
150, 147
94, 78
Market share
211, 193
Positive external effects
183, 159
Marketing
149, 136
Premium
240, 221
Slump
271, 254
Marketing mix
149, 136
Price differentiation
149, 136
Social control
240, 217
Material damage
240, 222
Price discrimination
149, 136
Sole trader
Price policy
149, 136
Specialisation
37, 20
Staff department
94, 83
Means
37, 9
Mechanisation
149, 133
Price war
Minimum wage
183, 172
67, 55
271, 248
94, 75
Primary incomes
271, 245
Standard of living
Money
37, 24
Prisoner’s dilemma
240, 217
State Pension Act (Algemene
Monopolistic competition
67, 56
Privatisation
240, 229
Monopoly
67, 55
Product advertising
149, 140
State pension premium
211, 198
Product policy
149, 138
Structure (of the economy)
211, 202
Production capacity
271, 259
Subsidy
183, 154
Sunk costs
240, 214
Multinational
183, 155
N
Production factors
National debt
211, 203
National insurance schemes
149, 131
37, 7
Profit and loss account (income
statement)
Ouderdomswet, AOW)
Supply curve
121, 106
Supply of labour
183, 157
211, 198
67, 47
183, 169
Nature
37, 7
Profit and loss budget
121, 98
Needs
37, 9
Progressive tax system
184, 179
T
Promotional policy
149, 140
Target group
149, 140
Proportional variable costs
149, 129
Taxable income
184, 179
Protectionism
183, 155
Taxes on income, profit and capital 183, 166
Public goods
183, 166
Total capital
Negative external effects
274
vennootschap)
183, 159
Net profit
121, 98
Net wages
149, 131
121, 97
Total costs
67, 46
Total profit
67, 45
Total revenue
67, 45
Transfer form
38, 27
Turnover (total revenue)
67, 45
U
Underinsured
240, 236
V
Variable costs
VAT
67, 46
121, 98
W
Wage tax
149, 131
Wedge
149, 132
Weighting factor
271, 267
Withholding taxes
149, 131
World trade
183, 153
275
Editing, design and production
Cover design
Studijos
Inside work design
Uitgeverij Malmberg, ’s-Hertogenbosch
Layout
Studijos
Technical drawings
Van Oort redactie en kartografie
Sittrop Grafisch Realisatiebureau
Illustrations
Bobby Pola
Photographic source references
Cover
Vincent van den Hoogen
Inside work
123rf, 5Hoog vormgeving, Adam Berry/Getty Images, Berend Vonk/Zone 5300, Bruno Press, Co de Kruijf/Hollandse Hoogte,
Danny van den Berg/ANP, Dixons.nl, Ed van de Pol/ANP, Erik van ‘t Woud/ANP, Getty Images, Hein de Kort/ComicHouse.nl,
Hollandse Hoogte, Hulton Archive/Getty Images, Joyce van Belkom/ANP, Juanmonino/Getty Images, Klaas Fopma/Hollandse
Hoogte, Koen Suyk/ANP, Koen van Weel/ANP, Lectrr/ComicHouse.nl, Maarten Pathuis, Make My Event, Merlijn Doomernik/
Hollandse Hoogte, Pedro Sluiter/Novum Foto, Peter Hilz/Hollandse Hoogte, Reid, Geleijnse & Van Tol, Robin Utrecht/ANP
Roger Dohmen/Hollandse Hoogte, Saltooo.be, Shutterstock, Siese Veenstra/Hollandse Hoogte, Sprout, YFM
559857
ISBN 978-90-345-9602-4
Fifth edition
© Malmberg ’s-Hertogenbosch
Alle rechten voorbehouden. Niets uit deze uitgave mag worden verveelvoudigd, opgeslagen in een geautomatiseerd gegevensbestand,
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Voor zover het maken van kopieën uit deze uitgave is toegestaan op grond van artikel 16b Auteurswet 1912 j° het Besluit van
20 juni 1974, St.b. 351, zoals gewijzigd bij het Besluit van 23 augustus 1985, St.b. 471, en artikel 17 Auteurswet 1912, dient men de
daarvoor wettelijk verschuldigde vergoedingen te voldoen aan de Stichting Reprorecht (Postbus 3051, 2130 KB Hoofddorp). Voor het
overnemen van gedeelte(n) uit deze uitgave in bloemlezingen, readers en andere compilatiewerken (artikel 16 Auteurswet 1912) dient
men zich tot de uitgever te wenden.
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Economics havo & vwo
Economics havo & vwo
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