12. Попит і пропозиція

Most people think of demand as being the desire for a certain economic product.

In economics the relationship of demand and price is expressed by the Law of Demand. It says that the demand for an economic product varies inversely with its price. In other words, if prices are high the quantities demanded will be low. If prices are low the quantities demanded will be high.

The demand for some products is such that consumers do care about changes in price when they buy a great many more units of product because of a relatively small reduction in price. The demand for the product is said to be elastic. For other products the demand is largely inelastic. This means that a change in price causes only a small change in the quantity demanded.

Economists define demand as a consumer’s desire or want, together with his willingness to pay for what he wants.

Economists talk about the Law of Supply, in which a rise in prices tends to increase supply, while a fall in prices tends to reduce it. Supplies of many commodities can generally be adjusted to suit market conditions. This means that changes in prices lead to changes in the quantity of a particular commodity which is made available to consumers. In such instances supply is said to be «elastic», because it can be increased or decreased rapidly in response to market prices. In economic theory, the term «supply» denotes the amount of a commodity or service offered for sale at a given price.

14. Market price

Prices play an important role in all economic markets. Prices serve as a link between producers and consumers. Prices, especially in a free market system, are also neutral.

The price system in a market economy is surprisingly flexible.

In economic markets, buyers and sellers have exactly the opposite hopes and intentions. The buyers come to the market larger to pay low prices. The sellers come to the market hoping for high prices.

In economics, the term «price» denotes the consideration in cash for the transfer of something valuable, such as goods, services, currencies, securities, the use of money or property for a limited period of time, etc.

Prices perform two important economic functions: they ration scarce resources, and they motivate production. As a general rule, the more scarce something is, the higher its price will be, and the fewer people will want to buy it. Economists describe that as the rationing effect of prices.

Price increases and decreases also send messages to suppliers and potential suppliers of goods and services. Similarly, price decreases drive producers out of the market. In this way prices encourage producers to increase or decrease their level of output. Economists refer to this as the production-motivating function of prices.

15. Labour

There are four major categories of labour that are based on the general level of skills needed to do any kind of job. These categories are unskilled, semiskilled, skilled and professional or managerial.

Unskilled labour. Workers who do not have the training to operate machines and equipment fall into the category of unskilled labour.

Semiskilled labour. Workers who have mechanical abilities fall into the category of semiskilled labour. They may operate electric floor polishers, or any other equipment that calls for a certain amount of skill.

Skilled labour. Workers who are able to operate complex equipment and who can do their tasks with little supervisions fall into the category of skilled labour.

Professional labour. Workers with high level skills such as doctors, lawyers and executives of large companies fall into the category of professional labour.

Money is not only a means of exchange but is also a means of measuring the value of men’s labour. Human labour produces both goods and services. It should be noted that any person engaged in private business is not paid a fixed sum for his activities.