Тема 15. SUPPLY AND MARKET PRICE

Supplyis the quantity of goods that producers are willing and able to sell at alternative prices in a given period, ceteris paribus. The determinantsof supply include:

– Technology

– Factor costs

– Other goods

– Taxes

– Expectations

– Number of sellers

Word processors, for example, are a technological improvement over standard typewriters. By making it easier to «produce» typing, they induce people to supply more typing services at every price.

When tax rates are high, people get to keep less of the income they earn. This reduction in after-tax income may make some people less willing to supply goods and services.

Expectations are also important. If you expect higher prices, lower costs, or reduced taxes, you may be more willing to perfect your skills. On the other hand, if you have bad expectations about future, you may find something else to do.

Supply shifts when the determinants change.

The law of supplystates that the quantity of a good supplied in a given time period increases as its price increases, ceteris paribus.

Why does the quantity of a product supplied change if its price rises or falls? The answer is that producers supply things to make a profit. The higher the price, the greater the incentive to produce and sell the product.

According to the law of supply the general form of a supply curve is upward sloping and it indicates that larger quantities will be offered at higher prices. An increase in supply implies a rightward shift of the supply curve.

The point where the supply curve and demand curve intersect is the equilibrium (market) price. Thus, equilibrium or market priceis the price at which the quantity of a good demanded in a given time period equals the quantity supplied.

At any higher price there will be a surplus– the quantity supplied exceeds the quantity demanded and at any lower price a shortage– the quantity demanded exceeds the quantity supplied at a given price. Only the equilibrium price clears the market. At that price, everyone who is willing to buy may do so, and everyone who wants to sell at that price may do so.

Shifts in demand or supply will affect market price. When everything else is held constant, an increase in demand will result in an increase in market price, and vice versa. Similarly, an increase in supply will result in a decrease in price, and vice versa.

VOCABULARY

to induce – змушувати, спонукати, схиляти до чогось, стимулю­вати

after-tax income – дохід після сплати податку

equilibrium– рівновага

upward sloping – похила направлена догори

surplus (Syn. excess) – надлишок

shortage (Syn. lack) – нестача, дефіцит

Answer the following questions:

1. What is supply?

2. What are the determinants of supply?

3. What does the law of supply state?

4. What is the general form of a supply curve? What does it mean?

5. What is market price?

6. How do shifts in demand and supply affect prices?

Match the following English word combinations with their Ukrainian equivalents:

1. be in excess supply	а. загальний об'єм пропозиції
2. be in low supply	b. вичерпати запас
3. bulk supply	с. грошова маса
4. direct supply	d. наявний запас
5. electric supply	e. бути з лишком
6. exhaust supply	f. постачання електроенергією
7. fresh supply	g. водопостачання
8. money supply	h. постачання крупними партіями
9. floating supply	і. повсякденна пропозиція
10. rival supply	j. бути дефіцитним
11. total supply	k. прямі поставки
12. supply a gap	1. нові поставки
13. water supply	m. пропозиція зі сторони конкурентів
14. to store supply	n. заповнити прогалину
15. supply on hand	о. робити запаси

Тема 16. DEMAND

Most people think of demand as being the desire for a certain economic product. That desire must be coupled withthe ability and willingness to pay. Effective demand, that is desire plus ability and willingness to pay, influences and helps to determine prices.

In economics the relationship of demand and price is expressed by the Law of Demand. It says that the demand for an economic product varies inverselywith its price. In other words, if prices are high the quantities demanded will be low. If prices are low the quantities demanded will be high.

The correlation between demand and price does not happen byз chance. For consumers price is an obstacle to buying, so when prices fall, the more consumers buy.

The demand for some products is such that consumers do care about changes in price when they buy a great many more units of product because of a relatively small reduction in price. The demand for the product is said to be elastic.

For other products the demand is largely inelastic. This means that a change in price causes only a small change in the quantity demanded. A higher or lower price for salt, for example, probably will not bring aboutmuch change in the quantity bought because people can consume just so much salt.

Even if the price were cut in half, the quantity demanded might not rise very much. Then too, the portion of a person's yearly budget that is spent on salt is so small that even if the price were to double, it would not make much difference in the quantity demanded.

COMMENTS

1.to be coupled with– бути поєднаним

2.inversely– обернено пропорційно

3.by chance– випадково

4. ... the demand for the product is said to be elastic–

кажуть, що попит на продукт еластичний

5.to bring about– призвести

6.if the price were cut in half– якщо ціну треба було б зменшити вдвічі

7.were to double– треба було б подвоїти

VOCABULARY EXERCISES

Find equivalents:

1. the Law of Demand	а. обернено пропорційно
2. to be coupled with	b. призвести
3. to bring about	c. визначати ціни
4. by chance	d. необхідна кількість
5. to determine prices	e. випадково
6. ability and willingness to pay	f. зміни в ціні
7. effective demand	g. закон попиту
8. reduction in price	h. інакше кажучи
9. inversely	i. бути поєднаним
10. changes in price	j. зниження ціни
11. in other words	k. ефективний попит
12. the quantity demanded	l. здатність та готовність платити

Тема 17. TAXATION

There are three types of taxes in the United States: proportional, progressive and regressive.

A proportional tax is one that imposes the same percentage rate of taxationon everyone, no matter what their income. Even when income goes up, the per cent of total income paid in taxes does not change.

A progressive tax is one that imposes a higher percentage rate of taxation of people with high incomes than on those with low incomes.

A regressive tax is one that imposes a higher percentage rate of taxation on low incomes than on high incomes. For example, a person with a yearly income of $10,000 may spend $3,000 on food, clothing and medicine, while a person with a yearly income of $100,000 may spend $20,000 on the same essentials. If the state sales tax, which is a regressive tax, were 4 per cent, the person with the lower income would pay a lesser amount in dollars but a higher percentage of total income.

Sales Taxes

A sales tax is a general tax levied on consumer purchases of nearly all products. It is added to the final price paid by the consumer.

For the most part, sales taxes are collected by individual merchants at the time of the sale and are turned over weekly or monthly to the proper government agency. Most states allow merchants to keep a small portion of what they collect to compensate for their time and book-keeping costs.

The sales tax generally is a very effective means of getting revenue for states and cities.

Property Taxes

A major source of revenue is the property tax — a tax on real property and tangible or intangible personal property. Real property includes land, buildings and anything else permanently attached to them. Tangible propertyis all tangible items of wealth not permanently attached to land or buildings, such as furniture, automobiles, the stock of goods in retail stores and clothing. Intangiblepersonal propertyincludes stocks, bonds, mortgages, and bank accounts.

The main problem with personal property as a source of revenue is that many items are not always brought to the attention of the tax assessor — the person who places value on property for tax purposes. Because of this, many things that should be taxed never are. Another problem is that some property is very hard to evaluate fairly.

VOCABULARY

1. percentage rate of taxation– процентна ставка оподаткування

2. no matter what their income– незалежно від прибутку

3. sales taxes– податок з продажу

4. property taxes– податок на власність

5. tangible property– матеріальні активи

6. intangible property– нематеріальні активи

Список літератури

1. Бонк Н.А. Английский шаг за шагом: Курс для начинающих. – М.: ООО "Издательство " Росмзн-Пресс", 2003.

2. Довгорук Л.Я. Англійська мова. Підручник для студентів вищих навчальних закладів. – К., 2005.

3. Кунатенко И.Ю. Англійська мова: Навчальний посібник. – К.: КНЕУ 2007.

4. Прибатень Ю.А., Довгопол Г.О., Бурлака І.Я. Англійська мова для економістів: Навчальний посібник. – К.: КНТ, 2008.

5. Шамхалова Н.А. Сучасна ділова англійська мова: Навчальний посібник – К.; КНЕУ, 2000.

6. Шпак В.К., Мустафа О.О., Бондар Т.І. Англійська для економістів і бізнесменів. Підручник. – К.: Вища школа, 2007.

7. Радышевская М.Н., Е.Н.Карпенко «Новейшие английские темы и диалоги». – Х.: ООО «Книжный клуб семейного досуга», 2009.

8. Pocket Oxford Russian Dictionary. – New York: Oxford University Press,