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

a) () In the majority of systems prices are fixed but in the minority itis possible to bargain.

b) () We know that a consumer’s satisfaction is greater than his financial sacrifice if he goes on buying a commodity at the current price.

c) () When a consumer becomes dissatisfied at paying the current price, he pays less.

d) () The financial sacrifice becomes too great when the quality of the commodity gets worse.

e) () The consumer will probably buy more if the price falls.

f) () If the price rises, the consumer will probably buy less.

g) () If the price remains the same, the consumer will reach a point when his sacrifice is greater than his satisfaction.

h) () ‘The Law of Diminishing Marginal Utility’ is the name which economists give to the tendency for a consumer’s desire to diminish as he buys more units.

3. Answer the following questions:

a) Prices are fixed in most economic systems, but what is possible in some systems?

b) What is the individual generally unable to change?

c) Under what conditions will a consumer go on buying a commodity?

d) What does the consumer show by buying more bananas?

e) What happens with each successive purchase?

f) At what point will the consumer stop buying the commodity at the current price?

g) What does a consumer’s desire tend to?

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

In advance, financial sacrifice, fixed prices, successive purchase, in general terms, the loss of money, the Law of Diminishing Marginal Utility, it is clear, remains the same, the nature of a commodity.

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

Зменшуватися; не краще, не гірше; бажання споживача придбати товар; з одного боку; приймати ціни; з іншого боку; продовжувати купувати; споживач; плануючи витрати; за короткий час; встановлювати ціни; однак; компенсувати споживачу щ-н.

6. Supply the missing prepositions where necessary:

a) If you do something … advance you do it before a particular date or event.

b) … peacetime bombs are not in very great demand. … wartime their utility is very high.

c) Consumer’s willingness to buy a commodity is often higher than his dislike … losing money.

d) People buy essential commodities … current prices. They cannot change them.

e) The Law of Diminishing Marginal Utility characterizes a special relationship … a commodity and a consumer.

f) …general terms, the higher the price is the fewer the consumer will buy.

g) The consumer’s desire…a commodity depends very much…its stock.

h) He always bargains … prices in shops … to get a discount.

7. Match an adjective from column A with noun/nouns from column B. Then make a sentence for each word partnership.

A B

1. current	a) utility
2. financial	b) purchase
3. marginal	c) terms
4. successive	d) nations
5. different	e) wants
6. maritime	f) sacrifice
7. individual	g) price
8. general	h) ways

8. Extend the idea:

a) Different commodities satisfy our needs in different ways.

b) Utility varies in relation to time, people and nations.

c) The higher the price is the fewer the consumer buys.

9. Finish the following sentences from memory:

a) In most economic systems the individual cannot …

b) When the consumer plans his expenditure …

c) A consumer will go on buying bananas …

d) With each successive purchase …

e) A point in time comes when …

f) The nature of a commodity …

g) There is a special relationship between …

h) The Law of Diminishing Marginal Utility states that …

10. Translate into English:

1. Здатність товарів та послуг задовольняти будь-які потреби називається корисністю.

2. Гранична корисність виміряє цінність речей.

3. Чим більше задоволення приносить товар споживачу, тим вище гранична корисність цього товару.

4. Лише доступні для споживача блага мають корисність.

5. Закон спадної граничної корисності впливає на формування споживчого вибору.

6. Кожен споживач прагне забезпечити собі максимальний рівень корисності. Він змушений діяти в межах певних бажань. За таких умов він повинен розподіляти свої можливості між кількома благами, щоб максимально задовольнитися.

7. Корисність цього товару дуже висока. Вона компенсує споживачу збиток грошей.

8. Більшістьлюдей буде купувати цей товар, поки в них не з’явиться його надлишок.

9. Плануючи витрати і роблячи покупки ми приймаємо встановлені ціни, поки наше задоволення більш, ніж бажання витратити гроші, хоча з кожною наступною покупкою це бажання зменшується.

10. Однак цей економічний закон не діє, якщо ціна або якість товару зменшується.

11. Write a summary of about 100 words on the economist’s concept of utility. Use the material in the unit and the following linking phrases: as, therefore, when, and, so, that’s why, because, although.

QUESTIONS FOR DISCUSSION

1. Now you know the Law of Diminishing Marginal Utility. How can it affect your willingness to buy everything you want? Ask your partners whether it encourages them to go shopping or prevents from unnecessary purchases?

2. Is the characteristic of a commodity to satisfy a want enough for buying it? Why? Why not?

VOCABULARY

English	Ukrainian	Russian
In advance	заздалегідь	заранее
To bargain over	торгуватися	торговаться
A centrally-planned economy	централізована економіка	централизованная экономика
To compensate for	компенсувати	компенсировать
To confuse with smth	плутати з чим-небудь	путать
The current price	поточна ціна	текущая цена
To diminish (v.)	спадати	уменьшаться
To fall sharply	різко падати	резко падать
Fixed prices	тверді ціни (фіксовані)	твёрдые цены (фиксированные)
To follow one’s willingness	керуватися бажанням	руководствоваться желанием
In different ways	по-різному	по-разному
In general terms	взагалі	в общем
The Law of Diminishing Marginal Utility	Закон спадної граничної корисності	Закон убывающей предельной полезности
The loss of money	збиток грошей	убыток
Marginal utility	гранична корисність	предельная полезность
Maritime nations	морські держави	морские страны
Mountain republics	гірські держави	горные республики
Priority	першочерговість, пріоритет	порядок срочности, очерёдности
Purchase	покупка	покупка
Utility	корисність	полезность
To vary between	змінюватися	разнится, варьирует между

UNIT 9

Supply and demand

WARMING-UP

1. Imagine you are a producer. You have goods which have cost you a lot to produce, but there are a lot of such things in the market. What would you do:

· sell them at a low price;

· stop selling them;

· throw away?

State your idea.

TEXT A

PRE-READING

1. Match these definitions with the words below:

a) The amount of something that can be produced and made available for people to buy	1. glut
b) The situation in which there is too much of something, especially goods or row materials, so that not all of it can be sold or used	2. demand
c) The quantity of a good that people will buy at any time depending on its price	3. supply

4. Read the text and check your answer.

In economics the term ‘supply’ does not mean the existing stock of a good; it refers to the amounts which traders are ready to offer for sale. The economists define it as the quantity of a commodity which is supplied at any given price over some given period of time. The amounts which firms are ready to supply will depend on the prices which people are ready to pay.

When farmers consider market prices to be too low, they may even throw away the crops, vegetables or fruit but not take these products to the market. The farmers produced vegetables and fruit, but they didn’t offer them for sale so they were not part of the supply of these things.

The Law of Supply states, ’More will be supplied at higher prices than at lower prices.’ If prices rise for a particular commodity, the rise will of course encourage producers to make more. On the other hand, if prices fall either locally or throughout the world, producers will reduce production. This can result in serious difficulties for many producers, and may cause them to go out of business completely. Over-production of any commodity can also create difficulties, because it can lead to a glut on the market, which may cause prices to fall sharply.

Supplies of many commodities can generally be adjusted to suit market conditions. This means that changes in prices lead to changes in the quantity of a particular commodity which is made available to consumers. Household goods and furniture belong to this category. In such instances supply is said to be ‘elastic’, because it can be increased or decreased rapidly in response to market prices.

PRACTICE

1. In the text find single words in italics for which these words can be substituted:

a) reserve

b) decrease

c) make happen

d) persuade

e) fast

f) absolutely

g) drop

h) think

i) excess

j) quantity

2. Answer the questions:

a) What does the word ‘supply’ refer to?

b) What does the Law of Supply state?

c) What does a rise in prices encourage?

d) What does a fall in prices cause?

e) The supply of what types of goods is said to be elastic?

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

a) () Supply does not refer to the amounts which traders are prepared to sell.

b) () When farmers consider the market price to be low they sell off their goods.

c) () According to the Law of Supply, a rise in prices tends to reduce supply.

d) () If prices fall locally, production will be reduced throughout the world.

e) () When there is a glut on the market, demand decreases and prices fall.

f) () Changes in prices lead to a change in the quality of a commodity.

g) () Supply is ‘elastic’ because market prices rise and fall.

h) () Over-production encourages producers to make more of the commodity.

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

Supply(n), refer, traders, for sale, given price, too low, throw away, go out of business, glut, create, over-production, completely, mean, stock, throughout the world, market conditions.

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

Пропонувати, кількість, закон пропозиції, на місцевому рівні, призвести, ринкова ціна, у відповідь на, відповідати (вимогам), пристосувати, вважати, зернові, заохочувати.

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

a) … is elastic when a small price … has a relatively large effect on the amount supplied.

b) Sometimes it takes long to … your production to market conditions.

c) … of any commodity can create difficulties.

d) … to your letter I inform you that your order has been received.

e) Supply is elastic when the amounts … for sale can be easily and quickly ….

f) Prices fell … and … the world.

g) They … our offer to be interesting.

h) … they are good suppliers but on the other they are bad payers.

i) This commodity glut … many difficulties in the economy of the country.

j) …, vegetables and fruit are agricultural goods.

7. Below are pairs of the sentences. In the first sentence there is a verb in italics. In the second sentence there is a blank. Make the italicized verb into a noun in order to fill the blank.

EXAMPLE: manage → manage + ment → management

a) It is sometimes necessary to adjust the quantity of goods flowing on to the market. This … is made according to market conditions.

b) He arranged the committee meeting. His … were very efficient.

c) The government encourages private enterprise. Their … sometimes takes the form of financial help.

d) Some economists are interested in measuring changes in the price of essential commodities. This … extends over a period of years.

e) The management tried to assess the amount of money needed for the plan. The … was to be made by a special committee.

f) He decided to invest his capital in the new enterprise. His … might be very profitable.

8. Supply the missing articles where necessary:

EXAMPLE: There is … supply of steel. … supply of steel is increasing.

There is a supply of steel. The supply of steel is increasing.

a) There is … shortage of bananas. … shortage of bananas will continue for some weeks.

b) There has been … change of government. … change in government will probably mean a change of policy. … change of policy may lead to … short period of instability. … short period of instability could create … feeling of insecurity.

c) The speaker suggested … special commission to study economic conditions. He said that … special commission should examine all aspects of national economic life. … commission should investigate … demands of … workers and … conditions under which they work. It should also hear … views of … employers. Such … commission would render … very valuable service to … nation.

TEXT B

PRE-READING

1. Discuss the following question in small groups:

Why do people tend to buy more of a good when its price falls?

2. Read the text and check your answers:

In economics, the word ‘demand’ refers to a consumer’s desire for a good together with his willingness and ability to pay the price of that good or service. The important point is that firms will only continue to supply goods and services if they can sell them at prices which cover their costs. So there will be a supply of a good or a service only if there is a demand for it.

Demand is defined as the quantity demanded at any given price over some given period of time. With very few exceptions, the quantity of a demanded good increases as the price decreases. The Law of Demand states, ’Other things being equal, more will be demanded at lower prices than at higher prices.’

So we can say that demand is indicated by our willingness to offer money for particular goods and services. Money has no value in itself, but serves as a means of exchange between commodities which do have a value to us.

People seldom have everything they want. Usually we have to decide carefully how to spend our income. When we exercise our choice, we do so according to our personal scale of preferences. In this scale of preferences essential commodities come first (food, clothing, shelter, medical expenses, etc.) then the kind of luxuries which help us to be comfortable (special furniture, telephone, insurance etc.) and finally non-essentials which give us personal pleasure (holidays, parties, chocolates, Hi-Fi, etc.). They may all seem important, but their true importance can be measured by deciding which we can live without. Our decisions indicate our scale of preferences and therefore our priorities.

All companies know that they will sell more goods if they lower their prices, and that they are likely to sell less if they raise their prices. And whether the total profit will increase or decrease depends upon the elasticity of demand. Demand is elastic when a small change in price has a relatively large effect on the quantity demanded; it is inelastic when a small change in price has a relatively small effect on the quantity demanded.

PRACTICE

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

a) () When people offer money for particular goods, they show that demand exists.

b) () Basic needs come before luxuries.

c) () Our decisions on how to use our money show what we need most and what we are willing to do without.

d) () Demand for essential commodities is always elastic.

e) () All firms try to sell their goods at lower prices.

f) () Demand is elastic when a small change in prices has relatively small effect.

g) () When we exercise our choice we do not pay attention to prices.

2. Answer the questions:

a) What definition do economists provide for the term ‘demand’?

b) Under what conditions will firms continue to supply their goods and services?

c) What does the Law of Demand state?

d) What indicates demand?

e) What value does money have?

f) What does the term ‘scale of preferences’ refer to?

g) What comes next in our scale of preferences?

h) What influences our scale of preferences?

i) How do you understand ‘elasticity’ of demand?

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

total profit, desire, luxuries, means of exchange, scale of preferences, comfortable, according to, other things being equal, exceptions, demand, expense.

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

попит, бажання, готовність, продавати за ціною, винятки, нарешті, уважно, страховка, витрати, виміряти, валовий прибуток, зручно, вартість, здаватися, предмети розкоші.

5. Change these sentences using the auxiliary verbs do or did. These verbs are used for emphases.

EXAMPLE: 1. These goods and services have a value.

These goods and services do have a value.

2. The people went to city to find work.

The people did go to the city to find work.

a) These factors have an effect upon the economic system.

b) The management tried to change the methods.

c) The representatives of the employers and employees met last week.

d) The decision made by the trade unions affects everyone in the industry.

e) Short-term economic anarchy has a bad effect on longterm stability and investment.

f) The surplus money provided capital for a new building scheme.

g) Stable conditions led to an improvement in the general state of the economy.

h) The government encourages new commercial enterprises.

i) A change in government usually means a change in policy.

j) The minister wanted to make a fundamental change in the national policy.

6. Give suitable opposites for these words:

a) minority	b) maximum	c) theoretical
d) positive	e) public	f) collective
g) solid	h) simplify	i) longterm

7. Many words are formed by adding –able. Do the exercise.

EXAMPLE: Fruit can perish. → Fruit is perishable.

NOTE that can is not always necessary in the first sentence.

a) The plan can work.

b) Market conditions can change.

c) Economic conditions can vary.

d) These policies suit (us).

e) Those products have a value.

f) Some investments make a profit.

8. Extend the idea.

a) Demand is very essential for a firm’s prosperity.

b) We exercise our choice according to our scale of preferences.

c) Even small changes in prices have effects on demand.

9. Translate into English.

1. Кількість благ та послуг, які споживачі бажають та мають можливість придбати в даний момент та в даному місці, зветься попитом.

2. Попит залежить не тільки від ціни, але і від кількості того товару на ринку.

3. Цей виробник продає свою продукцію за високими цінами, за винятком тих товарів, які не користуються попитом.

4. Ця картина не має цінності сама по собі, але колись вона належала видатному письменнику, і тому її ціна дуже висока.

5. Що до шкали наших переваг, то перше місце в ній займають товари першої необхідності, далі - предмети розкоші.

6. Щоб на ринку не було затоварювання, виробники контролюють кількість товару на ринку, та пристосовують його до ринкових вимог.

7. З одного боку перевиробництво призводить до падіння цін та примушує виробників закривати свої підприємства, з іншого це більш влаштовує покупців.

8. Ціни на нафту впали в цьому регіоні та по всьому світу.

9. Увесь запас цього товару торговці мали запропонувати к продажу, але це не покрило їхні витрати.

10. Попит та пропозиція бувають еластичними.

11. Пропозиція це кількість продукту, яку виробники бажають та мають можливість поставити на ринок за певний період часу.

12. Більш висока ціна стимулює підвищення пропозиції.

QUESTIONS FOR DISCUSSION

1. For each pair of commodities, state which you think is the more price elastic and give your reasons: perfume and salt; penicillin and ice-cream; cigarettes and books; ice-cream and chocolate ice-cream.

2. What will a rise in price do to total revenue when demand is elastic or inelastic? What will higher quantity do in these cases?

VOCABULARY

English	Ukrainian	Russian
according to	що до	согласно
adjust	пристосовувати	приспособлять
amount	кількість	количество
to cause	призводити	быть причиной
to consider	вважати	считать
to create	створювати	создавать
crops	зернові	зерновые
demand	попит	спрос
desire	бажання	желание
elastic	еластичний	эластичный
to encourage	стимулювати	поощрять
exceptions	винятки	исключения
the given price	дана ціна	данная цена
go out of business	закрити підприємство	закрыть предприятие
insurance	страховка	страховка
locally	на місцевому рівні	в данной местности
market conditions	ринкові умови	рыночные условия
market price	ринкова ціна	рыночная цена
mean	означати	означать
means of exchange	засоби обміну	средство обмена
measure by	виміряти	измерять
offer for sale	пропонувати на продаж	предлагать на продажу
on the one hand, on the other hand	з одного боку, з іншого боку	с одной стороны, с другой стороны
other things being equal	при інших рівних	при прочих равных
overproduction	перевиробництво	перепроизводство
refer	відносити	относиться
seem	здаватися	казаться
sell at prices	продавати за цінами	продавать о цене
stock	запас	запас
suit	відповідати	соответствовать
supply	пропозиція	предложение
throughout the world	по всьому світі	по всему миру
traders	торговці	торговцы
value	цінність	ценность

UNIT 10

Labour and capital

WARMING-UP

1. Do this quiz individually. Then compare your answers with a partner:

1) How much cash do you have with you at the moment? Do you:

a) know exactly?

b) know approximately?

c) not know at all?

2) Do you save money?

a) Regularly.

b) Never.

c) From time to time.

3) Do you normally check:

a) your change?

b) restaurant bills?

c) prices in several shops before you buy something?

4) What do you think about people who don’t pay the correct amount of tax? Is this:

a) a serious crime?

b) morally wrong but not a crime?

c) excellent business practice?

5) Do you:

a) feel guilty when you spend a lot of money?

b) sometimes go shopping intending to spend a lot of money?

c) only go shopping when you have something specific to buy?

3. Discuss your answers to this quiz. What do they say about your attitude to money? What do you have in common with your partner?

3.a There are lots of different ways you can get money. Here are five:

-earn it - inherit it

-steal it - find it

-win it

3.b Of these five which are the most common?

4.a There are also lots of things you can do with money. Here are six:

-lose it - invest it

-spend it - save it

-give it away - waste it

4.b Of these six, which give you the most pleasure and happiness?

TEXT A

PRE-READING

1. Match these definitions with the word combinations below:

A. The money invested in a business	1. Profit
B. The difference between the price received for a product and its cost (the price of the factors of production used to make it)	2.Self-employed
C. The working population	3. Capital
D. A person who works for himself, and is not paid a salary by someone else	4.Labour force

2. Read the following definitions for the term ‘money’. Which one from your point of view is the most appropriate?

a) a means of payment, especially coins and banknotes using for buying and selling;

b) a particular form of currency;

c) something that is used for wasting;

d) a means of exchange and a means of measuring;

e) wealth.

3. Read the text and check your answers:

Money is not only a means of exchange but is also a means of measuring the value of men’s labour. In the economic theory, “labour” is any work, which people undertake in return for a fixed payment. The work that mother undertakes caring for her children may be a hard work, but she receives no fixed payment. It is not therefore labour in the strict economic sense.

As a scientist, the economist is interested in measuring the services that people render to each other. Although he is aware of the services that people provide for no financial reward, he is not concerned with these services. He is interested essentially in services that are measurable in terms of money payments of a fixed and/or regular nature. In economics, money is the standard by which the economists judge about the value of things. This standard is not a religious or subjective standard, but an objective and scientific one.

Human labour produces both goods and services. The activities of a farm worker and a nurse are very different, but both are measurable in terms of payment they receive. Labour in this sense is not concerned with distinctions of social class, but simply with the payment of wages in return for work. When we talk about “ the national labour force”, however, we are thinking of all those people who are available for work within the nation, i.e. the working population.

It is necessary to note that any person engaged in private business is not paid a fixed sum for his activities. He is self-employed and his activities are partly those of an employer and partly those of an employee. If however he employs an assistant, to whom he pays a fixed wage, his new employee provides labour in return for payment. He receives his wages, while his employer receives the surplus (large or small) from the whole business. This surplus is the reward of private enterprise. Economists call this surplus “ profit ”.

PRACTICE

1. In the text find single words in italics for which these words can be substituted:

a) unchanging	b) earnings	c) work	d) prize
e) employee	f) looking after	g) criterion	h) cost

Дата добавления: 2015-11-14