МІНІСТЕРСТВО ОСВІТИ І НАУКИ УКРАЇНИ

Київський національний економічний університет

Криворізький економічний інститут методичні вказівки

до вивчення усних розмовних тем з англійської мови для студентів II курсу факультету „Економіка та управління”

Затверджено

на засіданні кафедри

укр. та іноземних мов

(протокол № від 2004)

Кривой Рог

2004

Методичні вказівки до вивчення усних розмовних тем з англійської мови для студентів II курсу факультету „Економіка управління”. – Кривий Ріг: КЕІ КНЕУ; 2004.35с

Авторський колектив: ст. викладач Переверзєва Л. С., доц. Мірошниченко Е. В., доц. Коржова Л. С., викладач Шломенко О. Б.

За загальною редакцією : ст. викладача Переверзєвої Л. С.

Відповідальний за випуск: доктор педагогічних наук, проф. Скидан С. О.

Методичні вказівки призначено для студентів 2 курсу факультету „Економіка управління”. Метою розробних методичних вказівок є формування та розвиток усно-мовленнєвих навичок і вмінь на основі спеціально відібраних тем за фахом. Навчальний посібник містить дев’ять усних розмовних тем, що відбивають загальні поняття та сучасні тенденції економіки. Основу посібника складають автентичні тексти з економічної літератури англомовних країн. Усі теми супроводжуються двомовними питаннями для обговорення. Рекомендовано для аудиторної та позааудиторної роботи з англійської мови.

CONTENTS

Utility and Prices. Demand and Supply.

Equilibrium of Demand and Supply 4

Market and Market Relations 7

Labour and Wage Rates 10

Money and its Functions. How the Banks Operate 13

Inflation 17

Trade and Development 20

The Types and Purposes of Commercial Enterprises 23

General Functions of Management 26

Globalization of the World Economy 30

Utility and Prices. Demand and Supply. Equilibrium of Demand and Supply

customer - покупець

product, item, goods - товар(и)

total utility - загальна корисність

diminishing marginal utility - спадна гранична корисність

amount, quantity – кількість

to consume – споживати

to increase, to rise - зростати, підвищуватися

to decrease, to decline - зменшуватися, знижуватися

purchase - покупка

price - ціна

cost - вартість

demand - попит

demand curve - крива попиту

supply - пропозиція

supply curve - крива пропозиції

business - підприємство

sale - продаж

equilibrium of supply and demand - рівновага пропозиції та попиту

excess - перевищення, надлишок

Customers buy goods to obtain satisfaction or "utility". A century ago economists proclaimed an important law which came to be known as the law of diminishing marginal utility. As you consume more of the same item, your total (psychological) utility increases. However, with successive new units of the item, your total utility will grow at a slower and slower rate because of a fundamental tendency for your psychological ability to appreciate more of the item to become less keen. These fact economists describe as follows.

As the amount consumed of an item increases, the marginal utility of the item or the extra utility added by its last unit tends to decrease.

So, after consuming a certain amount people get less and less satisfaction from each additional purchase. For example, the first ice cream cone consumed at the baseball game is great; the second is good; the third one is fair; the fourth one was "too much"; and the fifth one made you sick. Clearly we would not choose to pay as much to feel sick (the fifth cone) as we would pay to feel great (the first cone).

Believe it or not, at some point the principle of diminishing marginal

utility applies to almost everything we consume. As you buy more clothes you get better wear from the clothes you own, your wardrobe becomes more flexible, and your "satisfaction" or "utility" may increase. But sooner or later, the utility of having additional clothes will diminish. For example, you don't get your money's worth because you seldom wear certain outfits.

The law of diminishing marginal utility helps to explain a famous question that troubled Adam Smith in "The Wealth of Nations". He asked: "How is it that water, which is so very useful that life is impossible without it, has such a low price-while diamonds, which are quite unnecessary, have such a high price?" The answer is by now easy to phrase.

Diamonds are very scarce, the cost of getting extra ones is high; and water is relatively abundant, with its cost low in many areas of the world. The total utility of water does not determine its price. Why? Because people are free to buy or not buy that last little bit. If water is priced higher than its marginal utility, then that last unit cannot be sold. Therefore the price must fall until it reaches exactly the level of usefulness of the last little bit, no more and no less.

A consumer's willingness and ability to buy a product or service at a particular time and place determine demand. The decision to buy can be represented with the demand curve. This curve shows the relationship between the price of an item or service and the quantity consumers will buy, at a specific time, and holding everything else constant. Demand curves usually slope downward from left to right. This means that consumers are more willing and able to buy larger quantities of goods and services at relatively lower prices.

Supply is determined by the amounts of the goods that producers are willing to provide. The decision to sell can be represented with the supply curve. This curve shows the relationship between the price of an item or service and how many sellers will offer for sale at a specified time and holding everything else constant. In general supply curves slope upward from left to right. This means that at relatively high prices businesses will naturally want to produce and sell more. At lower prices less will be produced and supplied.

Now we see that buyers and sellers are in conflict. Buyers will only purchase more at lower prices while sellers will only sell more at higher prices. Can they reach an agreement? Yes. Their agreement is called the equilibrium of supply and demand. Market equilibrium can take place only at a price where the quantities supplied and demanded are equal. The equilibrium price, which remains unchanged as long as nothing else changes, is at the intersection point of supply and demand curves. When there is excess supply price declines, when there is excess demand price rises. At the equilibrium price there is no excess. Sellers sell all they want to sell, customers buy all they want to buy; and there is no tendency for either price or quantity to change.

QUESTIONS AND TASKS

1. Why can't the term total utility alone be used to describe consumption?

2. Solve Adam Smith's paradox of value using supply and demand curves as descriptive tools.

3. Choose an item available in your local market to demonstrate supply and demand.

4. How do such factors as advertising and change in the consumer's income influence market demand for a product? Provide examples to back up your statements.

5. Plot the supply and demand curve for perfume based on the following data:

At a price of (per ounce) US $	Buyers will take (thousand units)	Sellers will offer (thousand units)
12	40	15
18	25	25
21	20	30
30	5	40

What is the equilibrium price for perfume?