I. Give the Ukrainian equivalents for the following words and

word-combinations. Use them in the sentences of your own:

perishable/non-perishable goods; particular commodity; a rise in prices; on the other hand; overproduction; to go out of business; to reduce production; to encourage producers; to create difficulties; household goods; to lead to a glut on the market; changes in prices; to suit market conditions; market prices.

 

II. Change the sentences according to the pattern:

Pattern: He told me something. The prices will change.

He told me that the prices would change.

1. The government anticipated something. The workers will demand higher wages. 2. The management decided something. The new factory will be located in a different city. 3. The development committee arranged something. The meetings will be held at regular intervals over the next two years. 4. They told him something. The committee will meet next week.
5. The economists expected something. The prices will fluctuate considerably.

 

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

false say why:

1. Bananas are a typical example of goods that easily deteriorate. 2. Steel can be stored for a long time without losing its value. 3. The actual stock of cars in a factory is usually the same as the supply of cars available on the market. 4. According to the Law of Supply, a rise in prices tends to reduce supply. 5. If prices fall locally, production will be reduced throughout the world. 6. When there is a glut on the market, demand decreases and prices fall. 7. Changes in prices lead to a change in the quantity of a commodity.
8. Supply is «elastic» because market prices rise and fall.

IV. Change the italicized verb into a noun and fill in the blanks:

1. The government encourages private enterprise. Their ___________ sometimes takes the form of financial help. 2. It is sometimes necessary to adjust the quantity of goods flowing to the market. This __________ is made according to market conditions. 3. Some economists are interested in measuring changes in the price of essential commodities. This ____________ extends over a period of years. 4. The management tried to assess the amount of money needed for the plan. The ____________ was to be made by a special committee. 5. He arranged the committee meeting. His ____________ were very efficient. 6. He decided to invest his capital in the new enterprise. His __________ might be very profitable.

V. Answer the following questions:

1. What are perishable goods? 2. What two things are usually the same in quantity? 3. What happens when the Law of Supply operates?
4. What does a rise in prices encourage? 5. What does a fall in prices cause? 6. What serious effect may a fall in prices have on some producers? 7. What can overproduction lead to? 8. What happens when the supply of a commodity is adjusted to suit market conditions? 9. What kinds of goods belong to the category of commodities that can be adjusted easily? 10. What is meant by «elastic» supply?

VI. Punctuate the following passage. Provide capital letters,

commas, full stops, brackets, colons etc., where applicable:

non perishable goods such as coal steel cars and aeroplanes can be stored for considerable periods of time without loss of value this is not true however with perishables which must be placed on the market as quickly as possible if they are not sold quickly they will deteriorate if they deteriorate while in storage or in the shops both producers and distributors lose a large amount of money if there is a glut of certain perishables these commodities must be sold quickly even if the selling price is too low for a satisfactory profit

READING DRILLS

1. Practise the pronunciation of the following words:

a) stress the first syllable:

frequently, constant, variable, graphical, curve, normally, fear, upwards, downwards, slope, indicate, straight, vertical, graph, line, movement, actually.

b) stress the second syllable:

denote, determine, assume, assuming, assumed, assumption, exception, analysis, involve, relate, relation, relationship, dependent, commodity, remain, allow, reflect, amount, enable.

 

Text C

In economic theory, the term «supply» denotes the amount of a commodity or service offered for sale at a given price. Just as in the case of demand, supply is determined also by factors other than price, the most important being the cost of production and the period of time allowed to supply to adjust to a change in prices. In economic analysis, these other factors are frequently assumed to be constant. This assumption enables supply and price to be related in what is called the «supply function» (with price as the independent and supply as the dependent variable) and to be graphed in the supply curve.

The supply curve is the graphical representation of the supply function, i.e., of the relationship between price and supply. It shows us how many units of a particular commodity or service would be offered for sale at various prices, assuming that all other factors (such as the cost of production, the period of time involved) remain constant. The supply curve normally slopes upwards from left to right. This indicates that, other things being equal, more is offered for sale at higher prices.

There are, however, exceptions. For example, where goods are in fixed supply, the supply curve would be a straight vertical line. Another exception is the case where a fall in prices calls forth a larger supply because suppliers fear that prices might fall still further, and where, therefore, the supply curve actually slopes downwards. If changes in the other factors are allowed, this would be reflected not in a movement along the curve, but in a shift of the whole curve.

VOCABULARY EXERCISES

 

I. Give the Ukrainian equivalents for the following words and

word-combinations. Use them in the sentences of your own:

supply; to offer for sale; a fall in prices; a change in prices; the amount of a commodity or service; at a given price; the relationship between price and supply; the cost of production; supply function; supply curve; at various prices; a particular commodity or service; at higher prices; in fixed supply; the period of time involved; the graphical representation; to slope downwards; a straight vertical line; to slope upwards.

II. Find in the text the terms corresponding to the following

definitions:

1. Number of items offered for sale at every price at a particular time and place. 2. The money value of a good or service. 3. The graphical representation of the supply function. 4. The relationship between price and supply.

 

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

the list:

service; the Law of Supply; a product; a commodity; the supply function; the supply curve; supply schedule; sale; a supplier; producers; price.

1. In economics, the term «supply» denotes the amount of ________ or __________ offered for sale at a given ____________. 2. A table showing the quantities of _________ that would be offered for __________ at various prices at a given time is called _________. 3. _________ states that the quantity of an economic product offered for sale varies directly with its price. 4. The supply curve is the graphical representation of _________. 5. __________ normally slopes upwards from left to right. 6. Everyone who offers an economic product for sale is. 7. ________ want to sell more at a higher price and less at a lower price.

IV. Define which of the following items best completes

the statement:

A typical supply curve

a. slopes upwards from left to right.

b. slopes downwards from right to left.

c. is usually a straight line.

d. is always a curved line.

V. Complete the following sentences:

1. In economic theory, the term «supply» denotes.... 2. Just as in the case of demand, supply is determined also by.... 3. The supply curve is.... 4. It shows us.... 5. The supply curve normally slopes.... 6. This indicates that.... 7. Another exception is.... 8. If changes in the other factors are allowed....

VI. Answer the following questions:

1. What does the term «supply» denote in economic theory? 2. What factors is supply determined by? 3. What is called «supply function»?
4. What is supply curve? 5. What does the supply curve show? 6. How does the supply curve normally slope? 7. What does it indicate? 8. Are there any exceptions to supply curve?

COMMUNICATIVE SITUATIONS

1. Round-table discussion. The question on the agenda is «Supply and demand determine prices in a market economy».

Questions for discussion:

n «The law of demand works because consumers have the ability to substitute.
The law of supply works because producers have the ability to substitute».

Explain these statements.

n The four laws of supply and demand are the following:

a. An increase in demand generally raises price and raises quantity demanded.

b. A decrease in demand generally _________ price and ________ quantity demanded.

c. An increase in supply generally lowers price and raises quantity demanded.

d. A decrease in supply generally ________ price and _________ quantity demanded.

Fill in the blanks. Demonstrate each law with a supply-and-demand curve given below:

 

 

n production costs change as output changes:

Quantity q	Fixed cost (FC) $	Variable cost (VC) $	Total cost (TC) $
The major elements of a firm’s costs are its fixed costs (which don’t vary at all when output changes) and variable costs (which increase as output increases). Total costs are equal to fixed plus variable costs: TC= FC + VC.

GRAMMAR EXERCISES