VIII. Translate from Russian into English.

1. Спрос описывается шкалой, отражающей готовность покупателей покупать данный продукт в течение определенного периода по каждой из разных цен, по которым его могут продавать. Согласно закону спроса, потребители обычно покупают большее количество продукта по низкой цене, чем по высокой. Поэтому, при прочих равных условиях, связь между ценой и объемом спроса отрицательная, или обратная, а спрос графически изображается в виде нисходящей кривой.

2. Предложение описывается шкалой, показывающей количество продукта, которое производители готовы предлагать к продаже на рынке в течение определенного периода по каждой из возможных цен, по какой этот товар может быть продан. Закон спроса утверждает, что, при прочих равных условиях, производители предлагают к продаже большее количество продукта по высокой цене, чем по низкой. В результате связь между ценой и величиной предложения прямая, а кривая спроса – восходящая.

IX. Discussion Questions.

1. Suppose that you are on your way to the ice cream parlor. You have only enough money for a single scoop. When you arrive, there is a special for economics students, two scoops for the price of one. When you walk out with two scoops, you are showing that the law of demand works. Explain why the law of demand works.

2. The Too-Sweet Cereal Company is considering a new advertising campaign. What impact would Too-Sweet hope the advertising to have on the demand for its product?

3. The price of personal computers has dropped. As a result, what has happened to the demand for computers?

4. When income rises, what would you expect to happen to the demand for cultured pearls as opposed to the demand for imitation pearls?

5. Give an economic explanation for the sequence of events that start when the price of movie theater tickets rises. What impact would there be on the demand for popcorn, video cassette recorders, and video cassette tapes?

6. Which of the following illustrates a change in demand? A change in the quantity demanded?

a) You develop a craving for shrimp and buy more.

b) The price of shrimp falls and you buy more.

c) The price of shrimp falls and you buy more cocktail sauce.

d) The price of shrimp falls and you buy less lobster.

7. When the price of swim suits rises, what happens to the demand for swim suits? What happens to the demand for swim towels?

8. What is the difference between the income effect and a change in income?

9. Uncle Effron says that the law of demand is false. He says house prices rise and so does the number bought. Is Uncle Effron right about the law of demand? Explain.

10. Which of the following illustrates a change in supply? A change in quantity supplied?

a) The price of mopeds rises and more are produced.

b) The price of bikes rises and fewer mopeds are produced.

c) A major advancement is made in moped technology.

11. An oil refinery can produce gasoline or diesel fuel. When the price of gasoline rises, what happens to the supply of gasoline? The supply of diesel fuel?

12. A union in the widget industry successfully negotiates a new contract and raises wages. What happens to the supply of widgets?

13. When a new hybrid corn is developed that has low moisture requirements and is highly resistant to disease, what happens to the supply of corn?

14. When the price of Dr. Leedom’s Fabulous Elixir goes down, will Dr. Leedom increase or decrease production? Explain.

15. Suppose that you are an economics tutor and are paid $3.00 per hour. If the wage went up to $15.00 per hour, because of your incredible ability, would you tutor more or less? Explain.

16. Uncle Effron does not believe the law of supply. He says that he’s seen the price of gasoline go up, but a smaller quantity of gasoline is produced. Is Uncle Effron right about the law of supply? Explain.

17. In the sentence of the text in task VII it is said that the equilibrium of price and quantity will remain the same forever “unless something else changes”. Identify what specific changes might alter the equilibrium?