Unit 7. Supply and demand (1)
I. Find the following word-combinations in the texts and translate them into Russian.
a) we define the market, a set of arrangements, to bring together the buyer and the seller, to operate through intermediaries, to transact business, to stock the shelves, to bid against each other, superficially different, to guide resource allocation, to purchase at each conceivable price, to become lucrative, distinction
b) equilibrium price, to approach the problem diagrammatically, the horizontal axis, to plot the point, to obtain the demand curve, to re-examine the analysis of excess supply, voluntary participation, to involve buyers in forced purchases, to reconsider price determination, to bid up the price, to eliminate excess demand
А) равновесная цена, подход к проблеме схематически, горизонтальная ось, чтобы построить точку, получить кривую спроса, пересмотреть анализ избыточного предложения, добровольного участия, вовлечь покупателей в принудительные покупки, пересмотреть определение цены , Повышать цену, устранять избыточный спрос
II. Find in the texts English equivalents for the following.
a) цены служат ориентиром для распределения ресурсов, фондовая биржа, от имени клиента, устанавливать цену, гарантировать, сосредоточиться на основных характеристиках, изучить взаимодействие этих сил, поведение покупателя и продавца, назначать цену, диапазон цен, ограниченное количество шоколада будет востребовано, при прочих равных, стимул поставлять товар, быть боле точным, как цена корректируется (регулируется), чтобы сбалансировать объем спроса и предложения, стремиться увеличить поставки
b) A) the prices serve as a guide for the allocation of resources, the stock exchange, on behalf of the client, set the price, guarantee, focus on the main characteristics, study the interaction of these forces, buyer and seller behavior, price setting, price range, a limited amount of chocolate will be claimed, Equal, the incentive to supply the goods, be more accurate, how the price is adjusted (regulated), to balance the volume of supply and demand, to strive to increase supplies
c) условия на рынке, цена на шоколад, обозначить, рыночное равновесие, ниже равновесной цены, сокращать (урезать) цены
A) market conditions, the price of chocolate, mark, market equilibrium, below the equilibrium price, cut (cut) prices
III. Say what is meant by:
the quantity demanded, the quantity supplied, a market is a set of arrangements, at antique auctions the sellers take a passive role, the prices guide the society in choosing what, how, and for whom to purchase, price and quantity cannot be considered separately, buyers bid against each other, to stock the shelves, at each conceivable price, even when chocolate is free only a finite amount will be wanted
Количество спроса, количество, поставляемое, рынок, цена, рынок, цена, цена, цена, цена, покупатели предлагают друг другу, на полки, по каждой мыслимой цене, даже когда
IV. Listening.
1. Listen to the lecture.
2. Take notes to give an oral summary of it.
V. Match the words (1 – 13) with their corresponding definitions (a – m):
1. market
2. feature
3. each conceivable price
4. to charge
5. supply
6. demand
7. the quantity supplied
8. the quantity demanded
9. econometrics
10. a surplus
11. intersection
12. a shortage
13. the market equilibrium price
a) a distinct property or piece
b) to ask someone to pay an amount of money for something that you are selling to them or doing for them
c) maximum quantity of a good that sellers are willing to supply at a given price (over a fixed period of time)
d) the quantity demanded equals the quantity supplied at that price
e) any place where the sellers of a particular good or service can meet with the buyers of that goods and service where there is a potential for a transaction to take place
f) the amount of any commodity actually produced and available for purchase
g) each and every possible price
h) a point or line common to lines or surfaces that intersect
i) the branch of statistical theory concerned with the analysis of economic phenomena, in particular the application of statistical methods to economic data.
j) the quantity of a good or service that people want to buy
k) maximum quantity of good that buyers are willing to buy at a given price (over a fixed period of time)
l) occurs if the price is below the market equilibrium price
m) occurs if the price is above the market equilibrium price
1. рынок 2. функция 3. Каждая возможная цена 4. взимать 5. поставка 6. спрос 7. поставляемое количество 8. требуемое количество 9. эконометрика 10. излишек 11. Пересечение 12. Недостаток 13. рыночная равновесная цена А) отдельное свойство или часть Б) попросить кого-то заплатить определенную сумму за то, что вы продаете им или делаете для них C) максимальное количество товара, которое продавцы готовы предоставить по определенной цене (в течение определенного периода времени) Г) требуемое количество равно количеству, поставляемому по этой цене E) в любом месте, где продавцы определенного товара или услуги могут встретиться с покупателями этих товаров и услуг, когда есть вероятность совершения сделки F) сумма любого товара, фактически произведенного и доступного для покупки G) каждая возможная цена H) точка или линия, общие для линий или поверхностей, которые пересекаются I) отрасль статистической теории, связанная с анализом экономических явлений, в частности применение статистических методов к экономическим данным. J) количество товара или услуги, которые люди хотят купить K) максимальное количество товара, которое покупатели готовы покупать по определенной цене (в течение определенного периода времени) Л) происходит, если цена ниже рыночной равновесной цены М) происходит, если цена выше рыночной равновесной цены
VI. Match the words in the left-hand column with their synonyms:
| 1. lucrative 2. increasingly 3. technical advances 4. to imply 5. to purchase | a) more and more over a period of time b) bringing a lot of money c) infer d) to buy e) progress in science, technology |
Match the words in the left-hand column with their antonyms:
| 1. exceed 2. essential 3. adjust 4. decay 5. frustrated | a) disarrange b) happy c) less than a number or amount d) unimportant e) fusion |
VII. Insert suitable words into the gaps changing the form of the words if necessary.
to cause, exchange, shortages, a demand schedule, interplay, to equal, to be determined, demand curve, surpluses, to be brought together, purchase, a supply schedule, pressures, equilibrium price, equilibrium point, equilibrium, determinants, costs, to assume, supply curve
In our economic system resources are allocated through the 1)______ of goods and services between producers and consumers. Each good or service commands a price. These prices are 2)______ by the 3)______ between the demand for a product and its supply.
4)______ and its graphic representation, the 5)______, show the amounts of a good or service buyers would 6)______ at different prices.
7)______ and its graphic representation, the 8)______, show the amounts of a good or service sellers would offer for sale at different prices.
When buyers and sellers are 9)______ in the market, an 10)______ is established where the quantity demanded 11)______ the quantity supplied. This is the 12)______ price at which there are no 13)______ and no 14)______. In competitive markets, prices cannot stay above or below the equilibrium point for very long. Competitive 15)______ push prices back down or up to the 16)______.
The 17)______ of demand are consumer tastes and preferences, income levels, the availability and prices of substitutes and complements , and the population size of the market.
Supply is determined by production 18)______. The short-run situation 19)______ that plant size, equipment, and technology do not change; the long-run situation assumes production capacity and technology can change.
A change in demand or supply is reflected by changes along the entire demand or supply schedule. This 20)______ the schedule to shift left or right.
VIII. Give the terms for the following explanations.
1. The price at which the quantity supplied equals the quantity demanded.
2. The price prevailing in a market.
3. A set of arrangements by which buyers and sellers are in contact to exchange goods and services.
4. The situation in which quantity supplied exceeds quantity demanded at a particular price.
5. The quantity of a good that sellers wish to sell at each conceivable price.
6. The situation in which quantity demanded exceeds quantity supplied at a particular price.
7. A market in which price is determined purely by the forces of supply and demand.
8. The quantity of a good that buyers wish to purchase at each conceivable price.
9. A method of selling goods and services by competitive bidding.
10. An agent who acts on behalf of clients in buying and selling financial securities.
IX. Tasks for thought.
1. Which of the following could cause a rise in house prices?
a) A decline in house-building.
b) An increase in lending by building societies.
c) A rise in mortgage interest rates.
d) An increase in the willingness of local authorities to sell council houses to tenants.
2. The distinction between shifts of the demand and supply curves and movements along them is an important one. Place ticks in the appropriate columns of Table 1 to show the effects of changes in the ‘other things equal’ categories detailed in the first column. (Two ticks are required for each item).
Table 1. Movements of and along a curve
| Change in ‘other things equal’ category | Shift of demand curve | Movement along demand curve | Shift of supply curve | Movement along supply curve |
| Change in price of competing good | ||||
| Introduction of new technique of production | ||||
| A craze for the good | ||||
| A change in incomes | ||||
| A change in price of a material input |
3.
a) Suppose cold weather makes it more difficult to catch fish. What happens to the supply curve for fish? What happens to equilibrium price and quantity?
b) Suppose cold weather also reduces the quantity of fish demanded because people do not go shopping. Show what happens to the demand curve for fish?
c) What happens to the equilibrium quantity of fish when cold weather sets in and both these effects occur? Can you say what happens to the equilibrium price of fish?
X. Complete the sentences with prepositions and articles:
1. Going across, the demand curve shows ___1___ most buyers willing ___2___ buy (if they can!) ___3___ the current price. Going ___4___ and down, the demand curve shows the most buyers are willing ___5___ pay ___6___ that unit of the good, assuming they already have all the previous units: This is that unit's marginal benefit.
2. Going across, the supply curve shows ___7___ most sellers are willing to sell (if they can!) ___8___ the current price. Looking ___9___ the supply curve vertically, the supply price shows ___10___ lowest price ___11___ which sellers are willing ___12___ produce and sell one more unit of the good: This is that unit's marginal cost.
3. Going across, the market is ___13___ equilibrium only ___14___ the price where ___15___ quantity demanded (___16___ most buyers are willing ___17___ buy) equals ___18___ quantity supplied (___19___ most sellers are willing to sell). ___20___ this market clearing price, ___21___ quantity demanded equals ___22___ quantity supplied.
4. When you buy a good, ___23___ definition, someone else has sold it. Thus, ___24___ quantity bought of a good always equals ___25___ quantity sold. However, only ___26___ the market clearing price does ___27___ quantity demanded equal ___28___ quantity supplied.
XI. Read the text and choose the correct word or words from A, B, C or D to fill in each gap:
Market Equilibrium
Equilibrium ___1___ in a market when the price has no ___2___ to change. Only at the market equilibrium price do buyers buy the quantity they want and sellers get to sell the quantity they want.
At any price ___3___ than the equilibrium price, there will be a surplus. Sellers will want to supply more goods than buyers want to buy. The market is not in equilibrium because the sellers who cannot sell all they want will ___4___ buyers by lowering the price.
At any price lower than the equilibrium price, there will be a ___5___. Buyers will want to buy more goods than sellers want to sell. The market is not in equilibrium. Buyers who cannot purchase all they want will seek to ___6___ sellers to supply more by bidding the price ___7___.
When the market is in equilibrium buyers are actually buying the most they want to at that price and sellers are actually selling the most they ___8___ to at that price. The quantity demanded equals the quantity supplied. Since everyone is actually buying or selling what they want to, no one has any ___9___ to change the price.
This reflects the law of one price. In any given market, all units tend to trade at the same price. Sellers who try to charge more ___10___ business. Any buyers who try to buy for less will not find willing sellers. So all buy and sell at the market clearing price.
| A | occurs | B | happens | C | comes up | D | arises | |
| A | course | B | tendency | C | idea | D | power | |
| A | before | B | above | C | higher | D | lower | |
| A | pursue | B | find | C | aim at | D | seek | |
| A | shortage | B | surplus | C | disadvantage | D | excess | |
| A | enable | B | induce | C | allow | D | ask | |
| A | of | B | on | C | up | D | down | |
| A | achieve | B | assume | C | attend | D | intend | |
| A | incentive | B | privilege | C | purpose | D | preference | |
| A | start | B | lose | C | are in | D | transfer |
XII. Translate into English.
1. В рыночной экономической системе ресурсы распределяются посредством обмена товарами и услугами между производителями и потребителями.
2. Производитель, который может производить товар или услугу с меньшим количеством затрат производственного фактора (factor inputs), т.е. земли, труда и капитала, по сравнению с другим производителем имеет абсолютное преимущество.
3. Чем более специализированной и независимой становится экономическая деятельность, тем большую важность приобретает ровное функционирование экономической системы для того, чтобы координировать производство и распределение.
4. Определителями спроса являются потребительские вкусы и предпочтения, уровень доходов населения, наличие товаров - заменителей и их цены, а также цены и наличие комплиментарных товаров.
5. Снижение цен на товар вызывает повышение спроса на него и снижение его предложения, что приводит к образованию дефицита на рынке.
6. Модель спроса и предложения объясняет взаимодействие предпринимательского сектора и сектора домашних хозяйств в экономике.
7. Координация принимаемых решений на рынке обеспечивается равновесной ценой и равновесным количеством каждого товара (блага).
8. Цены как результат взаимодействия предложения и спроса сообщают важную информацию, необходимую для согласования решений, принимаемых домашними хозяйствами и фирмами.
9. Повышение спроса на товар неизбежно приводит к росту цен на него, и это стимулирует поставщиков в очень короткие сроки увеличить предложение товара для продажи.
10. Если производитель предполагает, что увеличившийся спрос не является временным явлением, то он начнет вкладывать средства в расширение производства, чтобы обеспечить таким образом долговременные поставки.
XIII. Translate the following text into English:
Возьмем статическую картинку. На графике 6 представлены две кривые: DD -- кривая спроса и SS --кривая предложения. Увеличение количества денег в обращении, грубо говоря, означает сдвиг кривой DD -- вправо вверх. И, как мы видим, уровень цен при этом заметно повышается. Впрочем, видно и то, что масштаб этого повышения зависит от того, на каком участке кривой предложения мы находимся. Если на том, что ближе к горизонтальному, то цены растут слабо, если на том, что ближе к вертикальному, то сильно.
Но если мы делаем не моментальный и даже не краткосрочный снимок нашей экономики, мы должны иметь в виду, что не только кривая спроса, но и кривая предложения может смещаться - сдвигаться вправо-вниз и разворачиваться. Это означает, что теперь хозяйство в состоянии произвести больше товара, потратив столько же денег, и (при развороте) что на увеличение спроса хозяйство будет реагировать интенсивным расширением предложения. Такие сдвиги кривой предложения происходят (опять-таки в общем) благодаря инвестициям, модернизации, инновациям, то есть тоже в результате некоего вливания денег в хозяйство. И на том же графике 6, сдвигая кривую SS одновременно с кривой спроса DD, мы можем увидеть, что если увеличение денег сопровождается сдвигом кривой предложения (или приводит к нему), то инфляция оказывается существенно меньше, чем в случае, если кривая SS остается на одном и том же месте.
Эти графические опыты позволяют нам сделать следующий логический вывод: реальное количество денег в экономике России растет постоянно, но существует некоторый уровень их роста, который позволяет сдвигать кривую предложения, то есть инвестировать, модернизировать и прочее. И когда этот уровень преодолевается, инфляция снижается; когда же темп роста денежной массы оказывается недостаточно высоким, рост количества денег в обращении приводит только к росту цен.
XIV. Answer the following questions:
1.Why do we hold price constant when we talk about increasing or decreasing demand?
2.Is it the same when people are willing to (1) buy more at each price and (2) pay a higher price for each quantity?
3.If consumers buy fewer burner covers for their stoves when their income goes up, are burner covers a normal good or an inferior good?
4.When the price of a good's complement goes up, what happens to the demand for the good?
5.How does the supply curve move vertically when supply increases or "goes up"? What do up and down refer to in demand and supply diagrams?
XV. Speaking.
1. Sketch a diagram showing the demand and supply curves for a commodity. Suppose that the price of the commodity is set at a level which is above the market clearing price. How will producers and consumers perceive this market situation? How are they likely to react? How would your analysis differ if the market price were to be set below the equilibrium level?
2. Discuss some of the ways in which a change in the demand or supply conditions in a market may spill over and affect conditions in another market. Provide some examples of such spillover effects.
UNIT 8 SUPPLY AND DEMAND (2)
I. Find the following word-combinations in the texts and translate them into Russian.
a) depicts the relation between price and quantity demanded; related goods; in everyday language; substitutes and complements; time goods; technological advances; when income rises; nasty cuts of meat; social attitudes; the emphasis on health and fitness
b) moreover, fancy equipment, to provide an incentive, an improvement in technology, enable firms, allow more output from the same inputs, stringent safety regulations, to extract surface mineral deposits
II. Find in the texts English equivalents for the following:
a) прочие факторы, имеющие отношение к кривым спроса; связанные товары; грубо говоря; более точное определение понятия «субститут»; дополняющие друг друга товары; имеет тенденцию к сокращению; скоропортящиеся продукты; прогресс в технологии; товары низкого качества; низкосортное мясо; могут позволить себе тратить больше; вкусы и предпочтения потребителя; спортивное снаряжение
b) (продукт) доступный при более низкой цене; сдвиг в кривой спроса; увеличить (расширить) выпуск продукта; стоимость вводимых факторов производства; усовершенствование системы очистки; семена, устойчивые к болезням; назначать повышенную цену
III. Say what is meant by:
everyday English; holding other things constant while speaking about the relation between price and quantity demanded; substitute; complement; the price is prohibitively high; the technological advance enables the new product to be made available at a much lower price; a normal good; an inferior goods; fancy equipment; to work overtime; time goods; improvement in mass production packaging techniques; less wastage; requires expensive landscaping; the ensuing scarcity will bid up the price
IV. Listening.
1. Listen to the lecture and do the tasks in the textbook.
2. Listen to the lecture again, putting down the important points to give an oral summary.
V. Match the words (1 – 9) with their corresponding definitions (a – i):
1. an input
2. substitutes
3. complementarity
4. the demand curve
5. shift in demand
6. normal good
7. inferior good
8. total costs
9. input prices
a) a relation between two goods or services in which a rise in the price of one decreases demand for the other, because these goods are often purchased and/or used together
b) shows the quantity demanded of a good at various prices, assuming that the nonprice determinants of demand, such as consumers’ income, don’t change
c) a good whose consumption increases with income
d) two goods that compete with each other
e) change in demand curve such that a different quantity is demanded at each price
f) a good for which, other things being equal, an increase in income leads to a decrease in demand
g) the sum of all the expenditure incurred during an accounting period, either within an organization, on a product, or on a process. it is often convenient to analyse the total costs into fixed costs and variable costs .
h) the prices at which the services of factors of production, or supplies of fuels, materials, and intermediate products can be obtained
i) something used to produce the good, such as labour or materials
VI. Match the words in the left-hand column with their synonyms:
| 1. to encounter 2. wastage 3. subsequently 4. the time goods 5. prohibitively | a) consequently b) overwhelmingly c) perishable products d) losses, damages e) come across |
Match the words in the left-hand column with their antonyms:
| 1. precise 2. income 3. upward 4. quarry 5. enable | a) downward b) accumulate c) ban d) rough e) losses |
VII. Fill in the gaps in the following text.
rise, productivity, conceivable, prolonged, rapid growth, predicts, go up, deflation, reverting, level, collapse, average, apparent, falling prices, demand, expects, locked, to fall, consumer prices, downward
Most people take it for granted that prices will always 1)______, and understandably so. A 60-year-old American has seen them 2)______ by more than 1,000% in his lifetime. Yet 3)______ inflation is a recent phenomenon. Until about 60 years ago prices in general were as likely 4)______ as to rise. On the eve of the First World War, for example, prices in Britain were almost exactly the same as they had been at the time of the great fire of London in 1666.
Now the world may be 5)______ to that earlier normality. The prices of many things have fallen over the past 12 months or so. It is 6)______ that the world may be in for a new period of global 7)______ (meaning falling consumer prices) for the first time since the 1930s.
Talk of deflation is certainly at its highest 8)______ since then. Gary Shilling, an American economist, 9)______ that American 10)______ will fall by an 11)______ 1-2% a year over the next decade. In Britain, the Centre for Economics and Business Research 12)______ to see 13)______ in nearest future. Several pundits* reckon that continental Europe is heading for deflation rather sooner.
Just how dangerous would that be? The answer is, it depends. In the 1930s, falling prices 14)______ economies into a 15)______ spiral, in which shrinking 16)______, deepening pessimism, financial distress and the 17)______ inability of governments to put things right led to economic 18)______. But deflation can also take a friendlier form – when it is driven by 19)______ in 20)______, for instance. Look around the world, and you see both kinds of deflation at work, and in some places a mixture of the two.
______________
*pundits – ученый муж (ироническое название для экономических и финансовых аналитиков)
VIII. Give the terms for the following explanations.
1. A good for which demand falls when income increases.
2. Two goods are described thus when an increase in the price of one is generally associated with a fall in demand for the other.
3. The choices made by consumers as to which products to consume.
4. The hours of work that are additional to those formally agreed with the labour force.
5. Rules imposed by governments to control the operation of the market.
6. The manufacture of a product in a very large quantities
7. The means of protecting and selling a product.
8. A good for which demand increases when income rises.
9. Quantity demanded of a good multiplied by its price.
10. The period necessary for complete adjustment to a price change.
IX. Say whether the following statements are true or false. Extend your ideas.
1. A change in the price of a good will cause a shift in its demand curve.
2. An increase in consumers’ incomes will cause an expansion in the demand for all goods.
3. A poor potato harvest will result in higher prices for chips, other things being equal.
4. The price charged for a good is the equilibrium price.
5. An inferior good is one that has been badly produced.
6. If the demand for a good rises following an increase in consumers’ incomes (other things being equal), that good is known as ‘normal’.
7. The imposition of a minimum legal wage will lead to an increase in employment.
8. In everyday parlance, two goods X and Y are known as complements if an increase in the price of X, other things equal, leads to a fall in demand for good Y.
9. The imposition of a pound per unit tax on a good will lead to a pound increase in the price of the good.
10. When the Pope gave permission for Catholics to eat meat on Fridays, the equilibrium price and quantity of fish fell.
X. Complete the sentences using prepositions from the box:
with, from(2), at(4), above, for, than(2), to(6), below, of, in, up, down
1. When the price differs ___1___ the market clearing price, trade occurs ___2___ the smaller of the quantity demanded or the quantity supplied (barring government subsidies or intervention). If the price is ___3___ the market clearing price, the quantity bought and sold equals the quantity demanded. There is a surplus because sellers want ___4___ sell more ___5___ demanders are buying. If the price is ___6___ the market clearing price, the quantity bought and sold equals the quantity supplied. There is a shortage because demanders want to buy more ___7___ sellers are selling.
2. Vertically, the market is ___8___ equilibrium ___9___ the quantity whose demand price equals its supply price. ___10___ a smaller quantity, buyers are willing ___11___ pay a price exceeding the good's marginal cost (supply price), giving incentives ___12___ sellers ___13___ produce more. ___14___ a larger quantity, buyers are not willing ___15___ pay a price that covers the good's marginal cost: These units will not be produced.
3. The demand and supply curves show how changing the price affects the quantity buyers want ___16___ buy and the quantity sellers want ___17___ sell. Changing the price ___18___ to zero or ___19___ to a trillion dollars does not shift either curve. They already show the effects ___20___ price. The one thing that never shifts the demand curve or supply curve ___21___ a good is the good's price! Never! Remembering this point will steer you away ___22__ most of the mistakes made ___23___ demand and supply curves.
XI. Read the text and choose the correct word or words from A, B, C or D to fill in each gap: