NP-1k-short

6.Because the household is such a small unit, no household has a significant impact ____ the market, and so the actions ____ any single household is its best effort to react ____ the market price and the goods available.

7.The correlation ____ price and how much ____ a good or service is supplied ____ the market is known as the supply relationship.

8.____ other words, the higher the price, the lower the quantity demanded.

9.Buyers want to buy ____ many goods ____ possible, ___ cheaply ___ possible.

10.When supply and demand are equal, the economy is said to be ___ equilibrium.

Ex.8. Choose and combine two parts logically to make complete sentences.

Ex.9. Read the text and choose the best option.

The supply/demand theory (1) ________ the paradox of inessential-but- expensive diamonds and cheap-but-essential water. The supply-and-demand theory tells us that diamonds are highly priced because they are (2) ________.

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There are objectively (3) ________of them relative to demand. If diamonds were as (4) _______ as gravel we would use them to pave our garden walks. More precisely, the (5) ________ point in the market for diamonds is reached at a high price per ounce. Recall that at the equilibrium point the supply and demand curves the paradox the quantity demanded (6) ________ the quantity supplied. Diamonds become more (7) ________ to produce as more are produced. Consequently, the supply curve slopes up: producers want a higher price (to cover their (8) ________ cost) if they have to produce more. The price is in equilibrium determined at the (9) ________ of supply and demand. Given the unique supply/demand circumstances in this market (people badly want diamonds and diamonds are costly to produce) the intersection (10) ________ at a high price. If the demand curve were to fall back towards the origin, the price would fall.

Ex.10. Look through the text again and replace the words /phrases in italics with similar ones.

1.Society needs to make choice what should be produced, how it will be produced, and who is allowed to buythose products.

2.The market answers these questions by means of supply and demand.

3.In microeconomics, demand refers to the way in which groups of people living together buy goods.

4.Each household or asmall organization is influenced by different factors.

5.Consumer preferences influence a household’s buying decision to a greatextent.

6.All buyers want to make the best use of the usefulness of a product.

7.Supply and demand is the chief support of the system of market economy.

8.The relationship between demand and supply is the basis of the forces behind the allocation of resources.

9.People naturally avoid buying a product that will refrain them from buying

something else they value more.

10.Two opposing forces of demand and supply form the market.

Ex.11. Translate into English:

1.Суспільствуслідробитивибірщодо того, щовиробляти, як слід виробляти товари та послуги, та хто може споживати ці товари та послуги.

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2.Преференції споживача дуже впливають на купівельне рішення сім’ї.

3.Попит та пропозиція завжди рівносильні, оскільки кількість куплених товарів дорівнює кількості проданих товарів.

4.Фірми працюють незалежно одна від одної, вирішуючи, що продавати та скільки продавати, залежно від ціни.

5.Саме сукупні сили попиту та пропозиції створюють ринкову економіку.

6.Попит та пропозиція є, можливо, однією з найголовніших концепцій економіки та основою ринкової економіки.

7.Ціна є відображенням попиту та пропозиції.

8.Кажуть,що ринкова рівновага настає, коли попит та пропозиція є рівними.

9.Продукти першої необхідності менш вразливі до ціни, тому що споживачі

будуть продовжувати купувати їх незважаючи на зростання ціни. 10.Еластичність відрізняється серед різних продуктів, оскільки деякі

продукти можуть бути більш важливими для споживача.

LANGUAGE SKILLS

Ex.12. Ask questions to which the following statements may be answers.

1.The market (everyone, producers and consumers together) determines the price of a product.

2.Demand is comprised of three things: desire, ability to pay and willingness to pay.

3.Another factor that affects such decisions is income.

4.Economists refer to the behaviour of sellers as the market force of supply.

5.Demand refers to how much (quantity) of a product or service is desired by buyers.

6.In market economy theories, demand and supply theory will allocate resources in the most efficient way possible.

7.Because supply and demand can shift and change, equilibrium in a standard market is also fluid.

8.Producers supply more at a higher price because selling a higher quantity at a higher price increases revenue.

9.When supply and demand are equal, the economy is said to be at equilibrium.

10.A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied.

Ex.13. Answer the questions:

1.What kind of choices does every society need to make?

2.What defines the price of a product under condition of competition?

3.Prove that the terms demand and supply not always mean the amount of goods actually sold or bought.

4.What do micro economists usually try to explain?

5.What is demand comprised of?

6.When is demand real?

7.Explain the termutility.

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8.What is demand?

9.What is supply?

10.What does the Law of Demand state?

11.What does the Law of Supply state ?

12.How do supply and demand shape the market?

13.When is the economy said to be at equilibrium?

14.Does equilibrium exist in the real market place?

15.What concept helps to understand supply and demand theory?

Ex.14. Make a presentation of the topic.

WRITING

Ex.15. Make up a plan for a summary of text A.

Ex.16. Using your plan as a base write a brief summary (25-30 sentences) of the text.

Ex.17. Using the information from the text, write an essay on one of the following topics:

a)An increase in demand raises the price of a particular good. An increase in price cuts demand for that good.

b)How does a rational consumer allocate a fixed income between the purchase of two commodities? Would the consumer always use an increase in income to buy more of both goods?

DISCUSSION POINTS

Ex.18. With your group mates do the following.

1.Analyze the effect, in the short run only, on the price of coffee of (i) a severe frost; (ii) a fall in the rate of VAT; (iii) the introduction of rationing.

You are not expected to have a detailed knowledge of the coffee industry.

Apply your understanding of general supply and demand analysis.

Make assumptions about the price elasticity of supply and demand for coffee

and then draw flat or steep curves to match.

2.Explain why the prices of some commodities fluctuate more than those of others.

Explain why unstable conditions of supply and demand result in price changes.

Explain why price inelasticity amplifies the effect on price of changes in supply and demand.

Make use of graphs and relevant examples.

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Ex.19. Explain the following sayings in your own words. What other sayings on the topic do you know?

1.Supply always comes on the heels of demand. Robert Collier, American motivational author, (1885-1950)

2.As scarce as truth is, the supply has always been in excess of the demand.Josh Billings, American humorist (Henry Wheeler Shaw) (1818 – 1885).

3.As the economy grows, so will the demand for energy.Cliff Stearns, the U.S. Representative for Florida's 6th congressional district, (1941)

4.A variety of factors contribute to the price of gasoline in the United States. These factors include worldwide supply, demand and competition for crude oil, taxes, regional differences in access to gasoline supplies and environmental regulations.Gary Miller, the U.S. Representative for California's 42nd congressional district, (1948)

5.It's the law of supply and demand. Demand is down, supply is up, so the price is down. Andrew Harrington, Economist,Australia&New Zealand Banking Group Ltd

TEXT B. THE ROLE OF PRICES

Ex.20. Scan the text below. What main factors does it mention to support the keynote, i.e. the role of prices?

Prices are key ingredients in our economy because they make things happen. If buyers want to own some items badly enough, they will pay more for them. (0) ________ Prices play such an important role in economic life that the United States is often described as a price-directed market economy. Let us see why.

1.Act as Signals to Buyers and Sellers. One of the things that prices do is carry information to buyers and sellers. (1) ________When prices are high enough, they send a "sell" signal to sellers (retailers), who can now earn a profit at the new price.

2.Encourage Efficient Production. Prices encourage business people to produce their goods at the lowest possible cost. (2) ________

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Firms that are efficient will produce more goods with fewer raw materials than firms that are inefficient. (3) ________ While these efforts are in the best interests of the sellers, all of us may benefit because we are provided with the things we want at lower costs.

3. Determine Who Will Receive the Things Produced. Finally, prices help to determine who will receive the economy's output of goods and services. The price that a worker receives for doing a job is called a wage. (4) ________What the worker can buy with those wages will depend, in turn, upon the prices of the goods and services the worker would like to own.

Let’s look at some examples. The most obvious cost a person bears in buying a product is the price of the product. Price reflects cost because people have a limited amount of funds that they can spend, and if they spend their money on one thing, they cannot spend it on another. (5) ________As a result, we expect people to buy more hamburger if the price is $1.00 per pound than if it is $2.00 per pound.

The amount of income a person receives affects the cost of buying an item because it determines which options a person must give up when buying a product. If a person with a low income spends $5000 for a trip around the world, he will have to cut back on food, clothing, or shelter. (6) ________

Increases in people's incomes raise consumption of most products. These products are called normal goods. There are some products, however, that people use less of as their income increases; these products are called inferior goods. Public transportation is an example - as people's incomes rise, they stop riding the bus and drive their own cars. (7) ________ It was because they were a symbol of "working-class" clothes that they were adopted by the radical left in the 1960s, and from there they moved into high fashion.

Prices of related goods also influence how much of a product people buy. Goods that are substitutes satisfy the same set of goals or preferences. An example of a substitute for hamburger is pork. (8) ________ The opposite of a substitute is a complement, a good that helps complete another in some way. Catsup and hamburger buns are complements to hamburger, and if they are priced low enough, consumption of hamburger may rise. Sometimes goods are such good complements that they are sold together and we think of them as a single item. (9) ________

There are other factors that influence the amount of a particular product that people are willing to buy, such as the number of consumers in the market and their expectations about future prices, incomes, and quality changes. To get a complete list for any product might be time consuming and difficult, but it is not necessary because we want to focus on the relationship between price and the quantity of a product that people are willing to buy during some interval of time. (10) ________

Ex.21. Read the text. Choose the best sentence A-J to fill each of the gaps 1- 10. Do not use any letter more than once. There is an example at the beginning.

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0.When sellers want to sell some items badly enough, they will lower their prices.

A When prices are low enough, they send a "buy" signal to buyers (consumers), who can now afford the things they want.

B If pork prices are high, people are tempted to shift away from pork to hamburger, and if pork prices are low, people are tempted to shift from hamburger to pork.

C Producers strive for efficiency as a way of increasing their profits.

D The same trip will cause a person with a high income to cut back on a very different set of options.

E Left shoes and right shoes are an example.

F Blue jeans were once another example-people with higher incomes bought them less frequently than people with lower incomes.

G To do this, we will assume that all other factors are held constant.

H The amount of this wage determines how much the worker has to spend.

IThe lessit costs to produce an item, the more likely it is that its producers will earn a profit.

JWhen the price of a product goes up, the amount of other things that a person must give up in order to buy the product rises.

Ex.22. Read the text and decide whether the following statements are true

(T)or false (F). Correct the false statements.

1.Prices are not very important in our economy.

2.Sellers always lower prices for the goods they sell.

3.Prices carry information to buyers and sellers.

4.When prices are low, buyers will buy less.

5.Sellers can earn profit when prices are high enough.

6.Prices encourage business people to produce less if the prices are low.

7.Efficient firms will produce less with fewer raw materials.

8.All of us will benefit if producers increase their profits through efficiency.

9.Prices tell who receives the economy’s output.

10.What the worker can buy will depend upon the economic situation in the country.

11.The amount of income a person receives doesn’t affect the cost of buying.

12.Increases in people's incomes raise consumption of most products. 13.Prices of related goods also influence how much of a product people buy.

14.Jeans were a symbol of "upper-class" clothes.

15.The number of consumers in the market and their expectations about future prices, incomes, and quality changes are other factors that influence the amount of a particular product that people are willing to buy.

Ex.23. Read the text again and answer the following questions.

1.Why is the US described as a price-directed economy?

2.What happens when prices go up?

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3.How can people get benefit from efficient work of some firms?

4.How can the prices determine who will receive the things produced?

5.What is the most obvious cost a person bears ?

6.Why does price reflect cost? Give an example.

7.In what way does the amount of income a person receives affect the cost of buying an item?

8.What are the normal goods and inferior goods? Give examples.

9.What is the difference between substitutes and complements?

10.What are some other factors that influence the amount of a particular product that people are willing to buy?

TEXT C: TWO FACTORS THAT AFFECT LABOUR SUPPLY AND

DEMAND

Before reading

If the price/cost factor is the main to affect supply and demand of commodity goods, how does it refer to the labour market? Can you think of any other factor?

Reading

Read an article from the website ehow.com and do the tasks following the text.

Know the factors that affect your labour supply and demand so your business can remain competitive.

(1)In every business that deals with a collection of employees, labour supply and demand must be a consideration by management or ownership. No business that requires additional employees can reach their potential without them; striking a balance between the labour available and the labour needed is always a concern that relates to productivity and to profits. Understanding the main factors that can sway labour supply and demand can help you to run a successful business.

(2)Before learning the factors that affect labour demand, you must first know exactly what is meant by the term. Simply put, labour demand is the amount of workers needed to get the job done. Labour demand is a decision by management or ownership concerning how many employees or labour hours to use to complete a necessary task. Usually, the decision is heavily influenced by money. It is in the company's best interests to use as little labour as necessary to save money while still accomplishing the workload that is required.

(3)On the opposite side of this carefully balanced scale is labour supply. Labour supply is simply the amount of workers available to a business at a given time. During times when labour supply is low, it can be tougher to retain employees because of other opportunities and fewer out-of-work people.

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(4)The wage factor is the most significant issue affecting labour supply and demand. People do not typically work for fun. They work for money and the amount they get paid is a central factor in deciding whether they will take a job or stay at a job when something else is available. Higher wages increase the labour supply for a company because it makes the job more attractive to more people. Lower wages, however, may increase the labour demand because companies can afford to hire more people at a lower rate than at a higher rate. This results in a constant tug of war in the delicate balance between supply and demand.

(5)Barriers to entry are a second factor that affects labour supply and demand. Demand from hiring companies may go up because the employees they seek are specialized in some particular skill or have many requirements of new hires. Meanwhile, the labour supply decreases significantly because of these barriers. If a company only considers master's degree holders for a position, the supply of candidates for the job drops significantly compared to a company seeking candidates with a bachelor's degree. In addition, companies that require complicated testing or that require new hires to "jump through hoops" to getthrough the interview process usually find that their labour supply drops off significantly because of other options in the market that are easier to nail down.

Task 1. Explain in your own words what labour demand and labour supply mean.

Task 2. Paraphrase the following sentence: Striking a balance between the labour available and the labour needed is always a concern that relates to productivity and to profits. (para.1)

Task 3. Why is it more difficult to retain employees when labour supply is low? (para.3)

Task 4. Explain what consequences changes in wages have. (para.4)

Task 5. Expression “jump through hoops” means

a)to do smth too soon, before the right time;

b)to do smth difficult in order to achieve smth;

c)to enthusiastically accept an opportunity or offer. (para.5)

BUSINESS COMMUNICATION

MAKING AN APPOINTMENT

1.Are you busy this week?

2.What are you doing tonight?

3.Where are you having lunch tomorrow?

4.What plans do you have for the next seven days?

5.What is your next appointment?

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Ex.1. Read the definitions from Longman Dictionary of Contemporary English.

ap point ment

1 [countable] an arrangement for a meeting at an agreed time and place, for a particular purpose

You can say: have an appointment, make an appointment, an appointment to do something, book an appointment (BrE), schedule an appointment (AmE), cancel an appointment, miss an appointment, doctor’s/dentist’s/dental appointment.

She has an appointment with a client at 10.30.

You should phone his secretary if you want to make an appointment. I have an appointment to see the doctor.

Please give us two days’ notice if you have to cancel an appointment. I was already forty-five minutes late for mydental appointment.

keep an appointment (go to an appointment you have arranged): For the third time in a row, she had failed to keep her appointment .

by appointment only (only if you make an appointment in advance): All consultations are by appointment only.

Ex.2. Replace the underlined expressions with appropriate forms of the verbs from Ex.1 above.

1.An appointment with John Smith was organized for 1 February.

2.But not everyone could go to it.

3.Even John Smith could not attend it.

4.So it was decided not to have the appointment at all.

5.It was arranged for 1 March.

6.She arranged an appointment for her son to see the doctor.

7.I've got a dental appointment at 3 o'clock.

8.He failed to go to the appointment he had arranged.

9.Visiting the castle is only at the time that has been arranged in advance.

10.You should phone his secretary if you want toput an appointment in your diary.

Ex.3. Questions for discussion.

1.What are typical problems of business appointments?

2.How can you explain the aim of business appointments?

3.Have you ever forgotten an appointment?

4.How do you remember your appointments?

5.Making an appointment can be complicated if two people are very busy. How do you find time that is convenient for both of you?

6.Imagine you are making a telephone call. This time you are arranging an appointment to see someone. What phrases might you use or hear?

Ex.4. Read a sample telephone conversation.

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