Reading drills

1. Practise the pronunciation of the following words:

a) stress the first syllable:

actually, purchasing, merely, obviously, frequently, normally, influence, substitute, constant, variable, curve, slope, downwards, range, shift;

b) stress the second syllable:

assume, support, particular, demander, analysis, relate, remain, position, commodity.

Text C

In economic theory, demand means the amount of a commodity or service that economic units are willing to buy, or actually buy, at a given price. In economic theory, therefore, demand is always effective demand, i.e., demand, supported by purchasing power¹, and not merely the desire for a particular commodity or service.

Obviously, demand is not only influenced by price, but also by many other factors, such as the incomes of the demanders and the prices of substitutes. In economic analysis, these other factors are frequently assumed to be constant. This allows one to relate a range of prices to the quantities demanded in what is called the demand function (with price as the independent and demand as the dependent variable) and to graph this relationship in the demand curve.

The demand curve² is the graphical representation of the demand function, i.e., of the relationship between price and demand. It tells us how many units of a particular commodity or service would be bought at various prices, assuming that all other factors (such as the incomes of the demanders and the prices of substitutes) remain unchanged. The demand curve normally slopes downwards from left to right, which means that more is bought at low prices than at higher prices. A famous exception to the rule of a downward-sloping demand curve is the Giffen paradox³. If the condition that all other factors remain unchanged is relaxed and the incomes of the demanders, for instance, are allowed to change, then the whole demand curve will shift its position.

Comments

1. purchasing power — купівельна спроможність

2. demand curve — крива попиту

3. Giffen paradox — парадокс Гіффена

Vocabulary exercises

I. Form adverbs from the following adjectives:

actual, usual, final, normal, willing, economic, particular, mere, obvious, frequent, steep, inverse, careful, constant, large, relative, effective, according.

2. Fill in the blanks below with the most appropriate terms from

the list:

price; service; purchasing power; demand curve; demand; incomes; demand function; commodity.

1. Demand means the amount of a ________ or ________ that economic units are willing to buy at a given price. 2. Demand is not only influenced by ________ but also many other factors. 3. Effective demand is always supported by _________ and not merely the desire for a particular commodity or service. 4. The demand curve is the graphical representation of the _________ , i. e., of the relationship between price and ________ . 5. If the conditions that all other factors remain unchanged is relaxed and the ___________ of the demanders are allowed to change, then the whole ___________ will shift its position.