The law of supply
Supply is the relation between the price of a good and the quantity available for sale at that price. It may be represented as a table or graph relating price and quantity supplied. Producers, for example business firms, are hypothesized to be profit-maximizers, meaning that they attempt to produce and supply the amount of goods that will bring them the highest profit. Supply is typically represented as a directly-proportional relation between price and quantity supplied. That is, the higher the price at which the good can be sold, the more of it producers will supply. The higher price makes it profitable to increase production. Just as on the demand side, the position of the supply can shift(меняться), say from a change in the price of a productive input or a technical improvement.
Relation-отношение
Quantity-количество
Tasks
1. Discuss with your partner.
Apart from price, what other things affect demand for a product or service?
What products or services are most in demand in our country now?
2. Writing
With a partner look at the supply and demand charts for ice-cream and answer the following questions together.
Figure 1
Euros per kilo Ice-cream, December
14 Supply
13
12
11
10
9
8
7
6
5
10 20 30 40 50 60 70 80
90 100
Quantity bought and sold(thousand kilos)
Figure 2
Euros
per kilo Ice-cream, June
14
13
12
11 Supply
10
9
8
7
6
5
10 20 30 40 50 60 70 80 90 100
Quantity bought and sold(thousand kilos)
What do the two charts compare?
What happens to the supply of ice-cream as price increases?
What happens to the demand of ice-cream as price increases?
What changes in June –supply or demand?
Why do you think there is a shift in demand for ice-cream in June?
3. Выразите свою точку зрения.
1. Tell in a few words what the theory of demand and supply is.
2. How do you understand the expression “Where there is demand, there is supply”?
При ответе используйте фразы:
To my mind … |
In my experience … |
In my opinion … |
As far as I understand … |
On the one hand, …on the other hand |
From my point of view … |
If my memory serves me right … |
If I am not mistaken … |
It seems to me that … |
Personally, I think … |
My personal view is that … |
I am sure/certain/convinced that … |
The fact is that … |
This proves that … |
It is obvious that … |
There is no doubt that … |
4. Learn the definitions of economic terms:
The money companies spend to manufacture their goods or provide their services are called costs.
Profit is overall revenue minus costs.
Fixed costs are costs that don’t change.
Variable costs are costs that change with the size of production.
Vocabulary
Costs-издержки, стоимость
Fixed costs- постоянные издержки
Variable costs- переменные издержки
Profit –прибыль
Supply-предложение
Demand-срос
Inflation- инфляция
unemployment.-безработица
5. О каких издержках идет речь: V(variable)
F(fixed)?
Raw materials
The rent
The cost of electricity
Hourly pay of part-time employees
The interest on loans and salaries
Retell the text about economics.