Equilibrium
Alfred Marshal. Price Theory Pioneer
Essential vocabulary
At will - whenever or however one pleases – за бажанням.
Change hands v. – to pass to another owner - переходити до інших рук. Syn. to pass into one’s hands.
Equal adj. – the same in quantity, quality, size, degree, level, etc. – рівний, однаковий. Equal to demand/supply – відповідний до попиту/пропозиції, to be equal – дорівнювати. Syn. identical, the same.
Excess n. – the amount by which one quantity is greater another – перебільшення, надмір. Excess demand – надмірний попит, excess of demand over supply - перевищення попиту над пропозицією, excess quantity – надмірна кількість, excess supply – надмірна пропозиція.
In effect – not in itself or directly, but in reality – справді, в дійсності. Syn. in fact, really, virtually. To be in effect – діяти, мати силу. Syn to be in operation, to be at work.
In the long run – measured over a prolonged period of time – у кінцевому підсумку, кінець кінцем, на закінчення, нарешті. Syn. after all, in the end, at long last, eventually, ultimately. Ant. in the short run
Quantity n. – a number or amount of anything, either specified or indefinite – кількість, розмір, величина. Excess quantity demanded – перебільшення величини попиту, дефіцит, нестача, excess quantity supplied – перебільшення величини пропозиції, надлишок, in quantity - у (великій) кількості, quantity demanded – величина попиту, quantity supplied – величина пропозиції.
Shift v. – to change position or direction – переміщувати. To shift in (inward) – переміщуватись до середини, to shift out (outward) – переміщуватись на- зовні, to shift to the right/to the left – переміщуватись вправо/вліво.
Shortage n. - condition of not having enough - нестача, брак, дефіцит. Shortage of money - грошовий дефіцит, job shortage - нестача робочих місць. Syn. excess quantity demanded, lack, scarcity.
Surplus n. - something that remains after needs have been met - надлишок, перевищення. Demand surplus - надлишок попиту, surplus of capital - надлишок капіталу, surplus of goods - надлишок товарів. Syn. excess quantity supplied, glut.
Exercise 1
Read, translate into Ukrainian in written form and learn by heart the definitions of the following economic terms and concepts.
Equilibrium price: the price of a good or service at which the quantity demanded matches the quantity supplied.
Equilibrium quantity: the number of products that would be sold at the equilibrium or market price.
Excess quantity demanded: the amount of a product that could be sold at a price lower than the market price.
Excess quantity supplied: the amount of a product available at a price higher than the market price.
Law of supply: supply of a product varies directly with its price.
Market price: price at which goods or services and money will actually be exchanged. The price at which supply exactly equals demand.
Supply: the number of items that sellers will offer for sale at every price at a particular time and place.
Supply curve: the graphic representation of the supply schedule.
Supply schedule: a table showing the quantities of a product that would be offered for sale at various prices at a given time.
Exercise 2
Give the Ukrainian equivalents for the following.
An effect of prices on buyers, to be in effect, a product supplied, in the belief, a vendor, to be based on holding variables, to slope upward, to affect the quantities supplied, to have the opposite effect, to shift the output to another product, the future expectations, by themselves, for any length of time, under perfect competition conditions, to enter the market, unfilled demand, an excess quantity supplied, to clear the market, to arrive at a price.
Exercise 3
Find the English equivalents for the following.
Торгувати, відповідати чомусь, стимул виробляти та продавати продукцію, інформація розповсюджується, спокушати, виходячи з цього, собівартість продукції, можливості отримання прибутку, бути в змозі, переходити до інших рук, взаємодія пропозиції і попиту, вcтановлення рівноваги, дорівнювати, ціни визначені на ринку, погоджуватись на ціну менше ринкової, залишити ринок, перебільшення величини попиту, знижувати, залишатися незмінним.
Exercise 4
Copy out from the texts the sentences containing the following words and word- combinations and translate these sentences into Ukrainian.
The price indicated, is keeping with, slopes upward, to affect the quantities supplied, production costs, shift the output, to be in position, by themselves, under perfect competition conditions, the unfilled demand, an excess quantity demanded, an excess quantity supplied.
Exercise 5
Match the words listed below with their dictionary definitions.
1. To pass to another owner.
2. Something that remains after needs have been met.
3. Not in itself or directly, but in reality.
4. A number or amount of anything, either specified or indefinite.
5. The amount by which one quantity is greater another.
Whenever or however one pleases.
Condition of not having enough.
Measured over a prolonged period of time.
To change position or direction.
The same in quantity, quality, size, degree, level, etc.
in effect in the ling run excess at will shortage
equal quantity surplus to change hands to shift
Exercise 6
Match each term in column A with its definition in column B.
A B
1. Demand a. A condition in which the quantity of a good demanded at a given price exceeds the quantity supplied
2. Demand curve b. A graphical representation of the relationship between the price of a good and the quantity of that good that sellers are willing to supply
3. Demand schedule c. It states that demand for a product varies inversely with its price
4. Equilibrium d. A consumer’s desire, willingness and ability to purchase a good or service by paying a certain price for it at a definite time
5. Equilibrium price e. The price that prevails in a market and at which commodities are actually exchanged for money
6. Equilibrium quantity f. The amount of an economic good that will be offered for sale in the market at a certain price and time
7. Excess quantity demanded g. A condition in which buyers’ and sellers’ plans are exactly equal, so that the quantity supplied exactly equals the quantity demanded at a given price
8. Excess quantity supplied h. It states that supply of a product varies directly with its price
9. Law of demand i. A curve on a graph relating the quantity of a good demanded to its price
10. Law of supply j. A table showing the quantities of a product that sellers would be able and willing to sell at various prices at a given period of time
11. Market price k. The market price of a commodity at which the demand and supply are balanced, or in equilibrium
12. Supply l. A table showing the quantities of a product that would be purchased at various prices at a given time
13. Supply curve m. A condition in which the quantity of a good supplied at a given price exceeds the quantity demanded
14. Supply schedule n. The quantity of a commodity determined in the market by the intersection of a supply curve and a demand curve
Exercise 7
Correct the following statement if you find them wrong. Make sure you begin your answers with such commonly accepted phrases as: I quite agree to this statement. Yes, that's quite right. I don't think that's quite right. I am afraid I don't agree to the statement. I'm afraid that's completely wrong. That's not quite right/true. I wouldn't say so. Oh, no, quite on the contrary. As far as I remember…
1. Equilibrium price is the amount of a product available at a price higher than the market price.
2. Equilibrium quantity is the price at which goods or services and money will actually be exchanged.
3. Excess quantity demanded shows that supply of a product varies directly with its price.
4. Market price is the amount of satisfaction or pleasure that a consumer receives from the consumption of goods and services.
5. Supply shows that the last item consumed will be less satisfying than the one before
6. Supply schedule is the measure of buyers’ eagerness to acquire a good or service.
7. Law of demand is a table showing the quantities of a product that would be purchased at various prices at a given time.
8. Demand is the graphical representation of the supply schedule.
Exercise 8
Read the text “Alfred Marshal. Price Theory Pioneer”. Translate the last paragraph into Ukrainian in written form. Explain in your own words Marshal’s contribution into the development of economics. While reading keep in your mind the following questions.
What have you learnt about Alfred Marshal from the text?
How did Marshal explain the economic events?
Why did Marshal compare two market forces?
What happens with the quantity of available goods in the short run and in the long run?
Exercise 9
Translate the sentences into English using the active vocabulary.
Величина пропозиції – це кількість одиниць товару, що продавці хочуть
продати у визначений час.
Дефіцит – це перебільшення величини попиту над величиною постачання.
3. Коли на ринку існує перебільшення величини попиту, покупці не можуть купити кількість, яку вони бажають.
4. В економіці взаємовідношення між пропозицією та ціною виражається законом пропозиції.
5. Крива пропозиції показує, що підприємці вироблятимуть більше товарів та послуг за відносно високими цінами, а за нижчими цінами буде менше вироблено і поставлено.
6. Надлишок – це перебільшення величини постачання над величиною попиту. 7. Коли на ринку існує перебільшення величини пропозиції, продавці не можуть продати кількість, яку вони бажають постачити.
8. Крива пропозиції переміщується наліво або направо, коли змінюється величина пропозиції.
9. Говорять, що ринок знаходиться у стані рівноваги, коли величина постачання точно дорівнює величині попиту.
10. Зміни в прибутках споживачів, смаках, технології виробництва, собівартості виробництва та зміни в кількості продавців на ринку та можливостях отримання прибутку спричиняють переміщення як кривої попиту, так і кривої пропозиції.
11. Рівновага пропозиції та попиту на ринку досягається при ціні, коли сили пропозиції і попиту збалансовані.
12. Рівноважна ціна – це така ціна, при якій величина попиту точно дорівнює величині пропозиції, що графічно відображується на перетині кривих попиту та пропозиції.
13. Ціни зменшуються, коли існує надмірність пропозиціі, і зростають, коли існує надмірність попиту.
14. За будь-якою ціною вищою ніж рівноважний перетин кривих пропозиції та попиту, величина пропозиції буде перебільшувати кількість, яку споживачі захочуть купити.
Exercise 10
Answer the following questions.
1. What is supply?
2. What does supply mean?
3. What is supply schedule?
4. What is supply schedule based on?
5. What is the difference between demand schedule and supply schedule?
What does the law of supply state?
Why do producers supply more goods at a higher price than at a lower price?
When and why do suppliers increase their production and rise prices?
What is supply curve?
What does supply curve show?
How does supply curve slope?
What do the quantities supplied depend on?
13. How does the price of a good or service affect the quantity supplied?
14. What role do prices play for producers?
How does the cost of production affect the behavior of producers?
Why are profit opportunities considered as factors that influence the quantities
supplied?
How are producers who can produce a product but don’t do it because of relatively low price called?
How do future expectations affect the quantities supplied?
How do changes in other market conditions affect supply?
What do supply and demand schedules show?
How do supply and demand interact to determine the market price of a good or service?
What is a market price?
23. What is an equilibrium price?
24. What is an equilibrium quantity?
Under what market conditions does the market price exist?
What are the conditions of perfect competition?
What is an excess quantity demanded?
When does an excess quantity demanded occur in the market?
What does an excess quantity demanded cause?
What is an excess quantity supplied?
When does an excess quantity supplied exist in the market?
What does an excess quantity supplied lead to?
How does the quantity of a product offered for sale change if sellers reduce or rise the price of that product?
Why do market prices and quantities change in response to changes in market conditions?
What does the intersection of demand and supply curves show?
UNIT THREE