IX. Choose the correct answer.

1. The determinant of demand that does not shift a demand curve is.

1. Income

2. Taste

3. The price of the good itself

4. The price of other goods

2. According to the law of demand the quantity of a good demanded in a given period.

1. Increases as its price rises, ceteris paribus

2. Decreases as its price falls, ceteris paribus

3. Increases as its price falls, ceteris paribus

4. Does none of the above

3. A change in the price of a good corresponds to a:

1. Change in the quantity demanded of the good

2. Shift in the demand curve of the good

3. Change in the consumer's taste

4. None of the above

4. Market demand is:

1. The sum of individual demands

2. The total quantity of a good or service people are willing and able to buy at alternative prices over a given period of time, ceteris paribus

3. a and b

5. Which of the following would generally cause an increase in the demand for automobiles?

1. A decrease in the price of automobiles

2. An increase in consumer's income

3. Consumer expectation that the price of automobiles will be lower next year

4. A fall in the price of gasoline

6. Which of the following would you expect to cause a decrease in the demand for automobiles?

1. A rise in the price of gasoline

1. Consumer expectation that the price of automobiles will be lower next year

1. Consumer expectation that a significant recession will develop that could last for a year

2. All of the above

7. A good for which an increase in consume income results in a decrease in demand is:

1. A consumer good

2. A normal good

3. An inferior good

4. A Giffen good

8. A pair of goods for which an increase in the price of one causes an increase in demand for the other are:

1. Complements

2. Substitutes

3. Capital goods

4. Necessities

X. Translate into English.

1. На будь-якому ринку, за інших рівних умов, кількість товарів і послуг, які покупці потребують, має тенденцію до зростання із зниженням їх ціни і до спаду із підвищенням ціни.

2. Обсяг попиту — це кількість товару або послуг, яку покупець хоче і здатний купити протягом даного періоду, наприклад, місяця або року.

3. Фраза «за інших рівних умов» означає, що зміна ціни про­дукту є єдиною зміною з числа речей, які впливають на кількість людей, які хочуть щось придбати.

4. Переміщення кривої попиту говорить про зміну в попиті, а саме зміни доходів покупців, зміни в смаках або зміни в цінах то­варів, які є замінниками або супутніми товарами.

5. Збільшений попит може бути представлений на графіку як крива, переміщена вправо.

6. Те, наскільки зміни в ціні вплинуть на попит, буде залежати від еластичності попиту на певний товар.

7. Нормальні товари — це товари, на які збільшення доходів споживачів веде до збільшення попиту.

8. Загальною характерною рисою кривої попиту є її нахил до­низу.

9. Однією з причин, коли попит на деякі товари буде нееластичним, є те, що ці товари є товарами першої необхідності.

XI. Text в Supply and market price

Supply is the quantity of goods that producers are willing and able to sell at alternative prices in a given period, ceteris paribus. The determinants of 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 supply states that the quantity of a good supplied in a given time period increases as its price increases, ceteris paribus.

Why the quantity of a product does 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 price is 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 notes:

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