V. Say whether these statements are true or false and if they are

false say why:

1. When people offer money for particular goods, they indicate that a demand exists. 2. Money is usually valuable in itself. 3. People do not usually have everything they want. 4. Our decisions on how to use our money show what we need most and what we are willing to do without.
5. Basic needs come before luxuries. 6. Demand for essential commodities is always elastic.

VI. Answer the following questions:

1. Elasticity of supply, as a response to changes in price, is related to demand, isn’t it? 2. What is the definition of demand? 3. How is demand indicated? 4. What is money? 5. What do we do when we exercise our choice? 6. What comes second in our scale of preferences? 7. What is our third priority? 8. What is elasticity of demand? 9. When is demand inelastic?

 

VII. Retell the text B using the following words and

word-combinations:

Elasticity of supply; changes in price; consumer’s desire; to offer money; particular goods or services; means of exchange; income; elasticity of demand; essential commodities; personal pleasure; relatively cheap; basic necessity; non-essentials; personal scale of preferences; accordingly; the prices rise steeply.

 

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.

 

II. 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.

III. Fill in the blanks with prepositions or adverbs if necessary:

1. In economic theory, demand means the amount... a commodity or service that economic units are willing to buy, or actually buy,... a given price. 2. Demand is... supported... purchasing power, and not merely the desire... a particular commodity or service. 3. Demand is not... influenced... price, but also... many other factors, such as the incomes... the demanders and the prices... substitutes. 4. The demand curve is the graphical representation... the demand function. 5. It normally slopes downwards... left... right, which means that more is bought... low prices than... higher prices.

 

IV. Match each term in Column A with its definition in Column B:

Column A Column B

1. demand	a. Money value of a good or service.
2. the Law of Demand	b. The graphical representation of the demand function.
3. consumer	c. Explains how much a change in price affects the quantity demanded.
4. price	d. good or service whose consumption is seen as essential in order to maintain a minimum standard of living in a society.
5. demand curve	e. A consumer’s willingness and ability to buy a product or service at a particular time and place.
6. demand elasticity	f. Anyone who uses goods or services.
7. purchasing power	g. All else being equal, more items will be sold at a lower price than at a higher price.
8. necessity	h. The value of a unit of money measured in terms of what it can buy.

V. Define which of the following items best completes the statement:

1. Demand curves

a. show that consumers are willing to buy more at lower prices.

b. are the same for all goods and services.

c. match the price of a good with the amount supplied.

d. are statistical charts prepared by a government agency.

2. A typical demand curve

a. slopes downward from left to right.

b. slopes downward from right to left.

c. is usually a straight line.

d. is always a curved line.

3. Which of the following would tend to have an inelastic

demand curve?

a. complementary goods.

b. luxuries.

c. goods with substitutes.

d. necessities.

 

VI. Say whether these statements are true or false and if they are

false say why:

1. In economic theory, demand means the amount of a commodity or service that economic units are willing to buy. 2. In economic theory demand is always effective demand. 3. Demand is only influenced by price. 4. Effective demand is always supported by merely the desire for a particular commodity or service. 5. In economic analysis, the incomes of the demanders and the prices of substitutes are frequently assumed to be constant. 6. The demand curve tells us how many units of a particular commodity or service would be sold at various prices. 7. The demand curve normally means that more is bought at low prices than at high prices.

 

VII. Complete the following sentences:

1. In economic theory, demand means.... 2. In economics demand is always effective demand, i.e.,.... 3. Demand is not only influenced by price.... 4. In economic analysis, these other factors are.... 5. The demandcurve is.... 6. It tells us.... 7. The demand curve normally slopes....

VIII. Answer the following questions:

1. What does «demand» mean in economic theory? 2. What is effective demand? 3. What factors is demand influenced by? 4. What is demand function? 5. What does the demand curve tell us? 6. At what price is more bought? 7. What is a famous exception to the rule of a downward-sloping demand curve? 8. When will the whole demand curve shift its position?

IX. Retell the text C using the following words and

word-combinations:

at a given price; effective demand; desire for a particular commodity or service; the prices of substitutes; quantity demanded; to graph the relationship in the demand curve; demand, supported by purchasing power; the incomes of the demanders; the graphical representation of the demand function; particular commodity or service; relationship between price and demand; at higher prices; at low prices; a downward-sloping demand curve;Giffen paradox.

GRAMMAR EXERCISES