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PRE-READING

1. Work with a partner. Answer the questions:

  1. What is the most valuable for you in goods and services? Why?

  2. Which feature of a product do you consider to be the most valuable when you go shopping? Choose from the words given below:

price quality satisfaction

2. Read the text.

Our basic needs are simple, but our additional individual wants are often very complex. When purchasing some goods the consumer follows his willingness to satisfy a want. Commodities of different kinds satisfy our wants in different ways: in relation to time, people and nations.

This characteristic of satisfying a want is known in economics as its ‘utility’. Utility varies between different people and between different nations. A vegetarian does not want meat, but may rate the utility of bananas very highly, while a meat-eater may prefer steak. A mountain-republic like Switzerland has little interest in submarines, while maritime nations rate them highly.

Economists say that utility determines ‘the relationship between a consumer and a commodity’. Utility, however, should not be confused with usefulness. For example, a submarine may or may not be useful in time of peace, but it satisfies a want.

In wartime, the utility of bombs is high, and the utility of pianos is low. Utility is therefore related to our decisions about priorities in production - particularly in a centrally-planned economy. The production of pianos falls sharply in wartime.

The utility of a commodity is also related to the quantity which is available to the consumer. If paper is freely available, people will not be so interested in buying too much of it. If there is an excess of paper, the relative demand for paper will go down. We can say that the utility of a commodity therefore decreases as the consumer’s stock of that commodity increases.

PRACTICE

1. Find words in the text for which these words and word combinations can be substituted:

  1. amount;

  2. rapidly;

  3. goes down;

  4. defines;

  1. extra;

  2. preferences;

  3. coastal;

  4. value

2. Say whether these statements true (t) or false (f), and if they are false say why.

    1. ( ) Our basic needs are complex.

    2. ( ) All commodities satisfy our wants in the same way.

    3. ( ) Utility is a characteristic of a commodity which shows how it satisfies a want.

    4. ( ) Vegetarians rate the utility of meat very highly.

    5. ( ) The Swiss nation is not particularly interested in submarines.

    6. ( ) In wartime the utility of pianos is high.

    7. ( ) In a centrally-planned economy, decisions about priorities are related to utility.

    8. ( ) The demand for paper goes down if the quantity of paper increases.

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

Additional individual wants, in relation to time, people and nations, to satisfy one’s wants in different ways, to follow one’s willingness, in wartime, to vary between smth/smb, characteristic, utility, to fall sharply, consumer’s stock, to have little interest in smth, submarine, to increase.

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