X. Render the text in English:

Спрос на некий товар – это количество товара, которое покупатели желают приобрести за некоторый период. Спрос зависит от цены данного товара и прочих факторов, включающих цены других товаров, в особенности альтернативных товаров, а также доходы покупателей и их вкусы. Предложение товара – это количество товара, которое продавцы желают продать за некоторый период. Объем предложения зависит от цены товара и других факторов, прежде всего от цен используемых в производстве ресурсов и имеющихся в распоряжении продавцов производственных технологий. Цена на конечный продукт должна быть достаточно высокой, чтобы покрывать расходы и давать прибыль. Если не будет перспективы прибыли, никто не начнет производство. Как видим, цена играет ведущую роль в модели «спрос – предложение». Как правило, при прочих равных условиях объем спроса на товар увеличивается, когда цена товара падает, и уменьшается, когда цена растет.

Wants and utilities

The study of economics begins with understanding human wants. By “want” the economist means the endless succession of material “wants” which are displayed by all living things. Everyone needs air, food, and water to support life. If we live in some climates we need clothing and shelter from the weather. Everyone needs a home to call his own; some territory which is his, by right.

Even when we have these basic “needs”, other more advanced “wants” present themselves. We want comfortable homes, entertainment, education, and transport. As the things we want increase in variety and become more and more sophisticated, the economy becomes more intricate too, until thousands of men are cooperating in different countries to produce the raw materials, designs, and specialized machinery which are necessary for a single thing we “want” – such as an aeroplane or a motor vehicle.

Everyone has an individual scale of preferences, a ladder-like arrangements of things in one’s own mind with the most preferred items towards the top of the scale. Some things never climb up the scale higher than the first few rungs, for they are constantly leapfrogged by other unexpected items. Every father of a family can think of things, often quite essential things, which he has been meaning to buy for years, but repeatedly has to reject for other items which the children need if they are to make the progress he wishes them to make.

What is it that decides the position of an item on a consumer’s scale of preferences? The answer is that preferences are based upon the consumers’ view of utility of a particular good.

Utility is the ability to satisfy wants. The basic needs of mankind are called wants, the means of satisfying these wants are called utilities. The purpose of an economy is to create utilities which will satisfy mankind’s wants.

Total utility is the total satisfaction we derive from the possession of a commodity. Usually total utility will continue to rise as we acquire more and more of the same goods. This would certainly be true, for example, of a collector’s acquisition of antiques. It might not be quite so true of a smoker’s purchases of cigarettes. There might come a point with many commodities where total utility had reached a maximum and a further supply would be a positive nuisance.

Marginal utility is the utility of one unit of a good or service. In fact we have to value it in imaginary “units of satisfaction”. Take the housewife buying bread. Her usual daily supply is two loaves, and each of these loaves will have great utility but the first loaf more than the second.

Diminishing marginal utility sets in as soon as the first loaf is bought; each extra loaf is valued less and less. Another loaf may have negative utility and be a cause of dissatisfaction. We may say then that diminishing marginal utility sets in very soon after we have purchased a normal supply. How does the housewife choose a balanced supply of goods and services? By comparing in her mind the marginal utilities of a further unit of various goods and services, one with another, and choosing the ones which will maximize her family’s satisfaction.

The production of utilities. Satisfaction can be achieved in two ways: by the enjoyment of goods or the enjoyment of services. Goods are tangible items which either satisfy the basic requirements of human life or make that life fuller and richer. Common examples are foods, clothing, housing, furniture, books, television sets, and motor cars. The actual point of satisfaction occurs when we consume the food, or beverage, wear the clothing, make use of the furniture, and so on, so that the name consumer goods is usually applied to these tangible utilities. There is another class of goods, called producer goods. These are goods which do not yield personal satisfaction to consumers but are part of the capital assets of production. A drilling machine, or an assembly line in a factory, are examples of producer goods.

Services are intangible “utilities”, which satisfy our needs by personal attention. The dentist who extracts a painful tooth; the surgeon who sets a broken leg; the television personality who brightens an otherwise dull evening; or the hairdresser who prepares us for a social occasion are examples of people offering personal service. As with goods, there is a class of services which is not directly personal in this way, but forms part of the productive organization. Such services are commercial services; trade, banking, transport, insurance, and communications are the chief examples.

The whole purpose of production, which makes use of producer goods and commercial services in the course of its activities, is to create utilities by providing an endless flow of consumer goods and personal services. In order to achieve this production of utilities the resources available to mankind must be mobilized. These resources are called the factors of production.

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