Say whether these statements true (T) or false (F), and if they are false say why.

a) () Our basic needs are complex.

b) () All commodities satisfy our wants in the same way.

c) () Utility is a characteristic of a commodity which shows how it satisfies a want.

d) () Vegetarians rate the utility of meat very highly.

e) () The Swiss nation is not particularly interested in submarines.

f) () In wartime the utility of pianos is high.

g) () In a centrally-planned economy, decisions about priorities are related to utility.

h) () The demand for paper goes down if the quantity of paper increases.

3. Look through the text again and give Ukrainian/Russian equivalents to the following English words and word combinations:

Additional individual wants, in relation to time, people and nations, to satisfy one’s wants in different ways, to follow one’s willingness, in wartime, to vary between smth/smb, characteristic, utility, to fall sharply, consumer’s stock, to have little interest in smth, submarine, to increase.

4. Give English equivalents to the following words and word combinations from the text:

Роблячи покупки, першочерговість виробництва, різні товари, морськи держави, гірська держава, корисність, оцінювати, знижатися (3 варіанта), бути доступним, таким чином, цікавитися, корисний, плутати з ч-н, Швейцарія, у мирний час, централізована економіка.

5.Complete the following sentences with words or word combinations from the text:

a) Bananas may … one kind of want. Textbooks … an entirely different need.

b) A product’s … may be very high in a certain part of the world. In a different part of the world its … may be very low.

c) There is a special … between labour and capital.

d) The quality of your product is extremely important. This is what buyers will be more … in.

e) This month our production has … sharply whereas our competitors have … their sales by 10%.

f) Is it true that you are a …? – Yes, that’s true. I don’t eat meat.

g) The economists may study economics in different ….

Match a verb from column A with a noun from column B. Then make a sentence for each word partnership.

A B

1. to satisfy	a) time, people and nations
2. to follow	b) geography
3. to increase	c) a want
4. to rate	d) the consumer’s stock
5. to be related to	e) one’s willingness
6. to have little interest in	f) utility

7. Rearrange the words to make up sentences:

a) People / of / a / and / wants / complex / have / wide / range.

b) Different / satisfy / our / in / different / commodities / ways / wants.

c) Utility / the / commodity / determines / consumer / between / relationship / a / a / and.

d) The / of / is / commodity / related / quantity / utility / a / the / the / to / to / available / consumer.

e) The / want / you / you / the / buy / less / more.

f) As / stock / decreases / commodity / commodity / consumer’s / increases / the / a / that / of / of / utility.

8. Finish the following sentences from memory:

a) Commodities of different kinds…

b) ‘Utility’ is the …

c) Utility varies between …

d) Utility determines …

e) In wartime the utility of bombs is …

f) Utility is related to …

g) The utility of a commodity decreases as…

9. Combine these pairs of sentences using although.

EXAMPLE:His satisfaction decreases. The prices remain the same.

1. His satisfaction decreases, although the prices remain the same.

2. Although the prices remain the same, his satisfaction decreases.

a) The individual cannot change the current price. He may want to do so.

b) The utility of the cigarettes has changed. Their quality is the same.

c) He wants to buy that car now. He should wait until he has enough money for both the car and other necessary things.

d) They haven’t done the work yet. It was planned five years ago.

e) Our plant has already started a new scheme. The central authority hasn’t given a permission yet.

10. Read the passage and fill in the gaps with the following words (the words may be used more than once):

a) then c) also e) both... and

b) and d) although

Prices have risen throughout the national economy since 1954. Between 1948 and 1953, there was a period of price stability. (1)… in 1960 the government decided to change the national policy considerably (2)… to introduce certain price controls (3)… controls were not very popular with industrialists. The government (4)… tried to reduce demand by limiting increases in wages throughout the economy (5)… limitation of wages was not very popular with the trade unions. This limitation of wage increases applied to (6) … the public … private sectors. An official Commission was created to regulate wage (7)… price increases. It was called the national prices (8)… wages board or NPWB.

TEXT B

PRE-READING

1. Read these headlines. Suggest what they could mean. What do they tell you? Having read these headlines can you guess what the text is going to be about?

Fixed Prices: Accept Or Bargain?

How Long Can A Commodity Satisfy A Want?

Is There Any Compensation?

The More You Buy The Less You Want

2. Read the text and choose the heading which from your point of view suits best:

In most economic systems, the prices of the majority of goods and services do not change over short periods of time. In some systems it is of course possible for an individual to bargain over prices, because they are not fixed in advance. In general terms, however, the individual cannot change the prices of the commodities he wants. When the consumer plans his expenditure, he must therefore accept these fixed prices. He must also pay this same fixed price no matter how many units he buys. A consumer will go on buying bananas for as long as he continues to get satisfaction. If he buys more, he shows that his satisfaction is still greater than his dislike of losing money. With each successive purchase, however, his satisfaction compensates less for the loss of money.

A point in time comes when the financial sacrifice is greater than the satisfaction of eating bananas. The consumer will therefore stop buying bananas at the current price. The bananas are unchanged; they are neither better nor worse than before. Their marginal utility to the consumer has, however, changed. The higher the price is the fewer he buys. The lower the price is the more he buys.

It is clear that the nature of a commodity remains the same, but its utility changes. This change indicates that a special relationship exists between goods and services on the one hand, and a consumer and his money on the other hand. The consumer’s desire for a commodity tends to diminish as he buys more units of that commodity. Economists call this tendency the Law of Diminishing Marginal Utility.

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