Find in the text the terms corresponding to the following
definitions:
1. Number of items offered for sale at every price at a particular time and place. 2. The money value of a good or service. 3. The graphical representation of the supply function. 4. The relationship between price and supply.
Fill in the blanks below with the most appropriate terms from
the list:
service; the Law of Supply; a product; a commodity; the supply function; the supply curve; supply schedule; sale; a supplier; producers; price.
1. In economics, the term «supply» denotes the amount of ________ or __________ offered for sale at a given ____________ . 2. A table showing the quantities of _________ that would be offered for __________ at various prices at a given time is called _________ . 3. _________ states that the quantity of an economic product offered for sale varies directly with its price. 4. The supply curve is the graphical representation of _________ . 5. __________ normally slopes upwards from left to right. 6. Everyone who offers an economic product for sale is . 7. ________ want to sell more at a higher price and less at a lower price.
IV. Define which of the following items best completes
the statement:
A typical supply curve
a. slopes upwards from left to right.
b. slopes downwards from right to left.
c. is usually a straight line.
d. is always a curved line.
V. Complete the following sentences:
1. In economic theory, the term «supply» denotes ... . 2. Just as in the case of demand, supply is determined also by ... . 3. The supply curve is ... . 4. It shows us ... . 5. The supply curve normally slopes ... . 6. This indicates that ... . 7. Another exception is ... . 8. If changes in the other factors are allowed ... .
VI. Answer the following questions:
1. What does the term «supply» denote in economic theory? 2. What factors is supply determined by? 3. What is called «supply function»? 4. What is supply curve? 5. What does the supply curve show? 6. How does the supply curve normally slope? 7. What does it indicate? 8. Are there any exceptions to supply curve?
Communicative situations
1. Round-table discussion. The question on the agenda is «Supply and demand determine prices in a market economy».
Questions for discussion:
«The law of demand works because consumers have the ability to substitute. The law of supply works because producers have the ability to substitute».
Explain these statements.
The four laws of supply and demand are the following:
a. An increase in demand generally raises price and raises quantity demanded.
b. A decrease in demand generally _________ price and ________ quantity demanded.
c. An increase in supply generally lowers price and raises quantity demanded.
d. A decrease in supply generally ________ price and _________ quantity demanded.
Fill in the blanks. Demonstrate each law with a supply-and-demand curve given below:
production costs change as output changes:
Quantity q |
Fixed cost (FC) $ |
Variable cost (VC) $ |
Total cost (TC) $ |
0 1 2 3 4 5 6 |
55 55 55 55 55 55 55 |
0 30 55 75 105 155 225 |
55 85 110 130 160 210 280 |
The major elements of a firm’s costs are its fixed costs (which don’t vary at all when output changes) and variable costs (which increase as output increases). Total costs are equal to fixed plus variable costs: TC= FC + VC. |
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