Общий взгляд на архитектуру UNIXThe theory of supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. The supply and demand model describes how prices vary as a result of a balance between product availability and consumer demand. Since contemporary economies rely on the market forces of supply and demand instead of government forces to distribute goods and services there must be a method for determining who gets the products that are produced. This is where the laws of supply and demand begin to work. By themselves these laws give us basic information, but when working together they are the key to distribution in a market economy. It is not enough for a buyer to want or desire an item. He or she must show the ability to pay and then the willingness to pay. In economics, demand is comprised of people’s desire, willingness and ability to purchase particular amounts of goods or services at certain prices in a given period of time. To the economists consumers make rational choices about how much to buy and how to spend their income on the products that will give them the greatest satisfaction at the least cost. So, demand describes the behavior of buyers. What factors alter a consumer’s desire, willingness and ability to pay for products? Some factors include consumers’ income and tastes, the prices and availability of related products like substitutes or complementary goods, and the item’s usefulness. Substitutes are goods that satisfy similar needs and which are normally consumed in place of each other. As the price of one substitute declines, demand for the other substitute will decrease. Butter and margarine are close substitutes. If the price of butter goes up, then people will be apt to substitute margarine for butter. Complementary goods are those that are normally consumed together (e.g., DVD players and DVD movies). An increase in the price of a product will diminish demand for its complement while a decrease in the price of a product will increase demand for its complement. Think of the item’s usefulness this way. It is a hot summer day and you are gasping for a drink *. You come across a lemonade stand and gulp down a glass*. It tasted great so you want another. This second glass is marginal utility meaning an extra satisfaction a consumer gets by purchasing one more unit of a product. But now you reach for a third glass. Suddenly your stomach is bloated and you are feeling sick. That means that the law of diminishing marginal utility comes into effect! The law of demand states that the higher the price of a product, the fewer people will demand that product, that is, demand for a product varies inversely with its price, all other factors remaining equal *. Factors other than a good’s price which affect the amount consumers are willing to buy are called the non-price determinants of demand. The law of demand expresses the relationship between prices and the quantity of goods and services that would be purchased at each and every price. In other words, the higher the price of a product, the lower the quantity demanded. Economists like to look at things graphically. A demand schedule is a table showing the number of units of a product that would be purchased at various prices during a given period of time. The information presented in a graphic form is called a demand curve. It shows an inverse relationship between the price and the quantity demanded. Or to put it another way, the demand curve represents the quantities of a product or service which consumers are willing and able to buy at various prices, all non-price factors being equal. The demand curve slopes downward from left to right based on the law of demand. The advantage of the curve is that it enables economists to see the relation between price and quantity demandedand to calculate approximately what the demand would be for those prices falling in between the prices that are in the demand schedule. Each point along the curve represents a different price-quantity combination.
Demand schedule for cut jeans
Since the quantity demanded is greater at a lower price the demand curve shifts to the right. On the other hand, decreased demand causes the curve to shift to the left because at a higher price the quantity demanded is less. The key point is to distinguish between demand and the quantity demanded. Ú Demand refers to how much of a product or service is desired by buyers. Ú The quantity demanded is the amount of a product that people are willing to buy at a certain price. The difference is subtle but important. If the demand of ice cream goes up in summer it is because consumptive demand has truly increased, clearly it is hot. In this case the business can most likely raise prices without suffering a cut in sales. This is a change in the quantity demanded. In winter the business incurs a sales fall at the same price. The only way out of increasing sales is to reduce the price. As a result of a cut in price the increased sales of ice cream means that consumer demand has artificially been manipulated. In reality, actual demand is low but extra efforts have to be made to increase sales. This leads to a change in demand. Economists distinguish two different ways that the quantity of purchases of a product can change. Ø According to the law of demand a change in price results in a change in the quantity demanded, that is, more will be purchased but only at a lower price. Thus, the only thing that can change the quantity demanded is a change in the market price, all the non-price determinants remaining the same. Ø When one of the non-price factors changes there will be a change in demand, the good’s price being equal. All of the non-price determinants (changes in the size of the market, income of the average consumer, population size, the prices and availability of related goods, consumer preferences) are directly related to consumers. In other words, at any given price, consumers will be willing and able to purchase either more or less of a product that depends on its price. To understand better the theory of supply and demand it is necessary to know how much buyers and sellers respond to price changes. This responsiveness is called elasticity. Elasticity varies among products because some products may be more essential to the consumer. A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded. A price increase of a product or service that isn’t considered a necessity will discourage more consumers to buy this product or service. On the other hand, an inelastic good or service is one in which changes in price bring about only modest changes in the quantity demanded, if any at all. Products that are necessities are more insensitive to price changes because consumers will continue buying these products despite a price rise. It is known as the price elasticity of demand. In economics, the price elasticity of demand is an elasticity that measures the nature and degree of the relationship between changes in the quantity demanded of a commodity and changes in its price. One typical application of the concept of elasticity is to consider what happens to customer demand for a product when prices increase. As the price of a product rises, consumers will usually demand less of that product, perhaps by consuming less, substituting another product for it, and so on. The greater the extent to which demand falls as price rises, the greater the price elasticity of demand is. Demand is called elastic if a small change in price has a relatively large effect on the quantity demanded. The number and quality of substitutes for a product are the basic influence on price elasticity of demand. If the prices of substitutes remain the same, a rise in the product’s price will discourage consumers from buying this product. On the other hand, if there is a price cut in the product, consumers will substitute other items for this product. Thus, the demand for this product tends to be elastic. In general, demand is elastic for non-essential commodities (visits to theatres or concerts, holidays, parties, etc.) However, there are some goods that consumers cannot consume less of, and cannot find a proper substitute even if prices rise. Some essential goods that are relatively inexpensive and for which it is difficult to find substitutes are said to have inelastic demand. To put it another way, a change in price results in a relatively small effect on the quantity demanded.
COMMENTS: to gasp for a drink – помирати від спраги; to gulp down a glass – жадібно/квапливо проковтнути напій; all other factors remaining equal – за умов, що усі інші фактори залишаються незмінними;
Exercise 1. Read, translate into Ukrainian in writing and memorize the following economic terms and concepts.
Exercise 2. Give the Ukrainian equivalents for the following. 1. the most fundamental concepts ___________________________________________________ 2. product availability _____________________________________________________________ 3. to rely on the market forces of supply and demand ___________________________________ ____________________________________________________________________________ 4. the key to distribution ___________________________________________________________ 5. in place of each other ___________________________________________________________ 6. to substitute margarine for butter __________________________________________________ 7. an extra satisfaction ____________________________________________________________ 8. to describe the behavior of buyers _________________________________________________ 9. factors other than a good’s price __________________________________________________ 10. the number of units of a product __________________________________________________ 11. all non-price factors being equal __________________________________________________ 12. the key point is to distinguish ____________________________________________________ 13. the demand was artificially manipulated ____________________________________________ 14. demand at any given price _______________________________________________________ 15. to be more essential to the consumer ______________________________________________ 16. a sharp change in the quantity demanded ___________________________________________ 17. to bring about only modest changes in the quantity demanded __________________________ _____________________________________________________________________________ 18. by substituting another product for it ______________________________________________ 19. a rise in the product’s price ______________________________________________________ 20. to find a proper substitute _______________________________________________________ 21. the non-essential commodities ___________________________________________________
Exercise 3. Find the English equivalents for the following. 1. Основа ринкової економіка ____________________________________________________ 2. готовність платити ___________________________________________________________ 3. змінювати бажання споживача _________________________________________________ 4. наявність спорідненої продукції ________________________________________________ 5. близькі товари-замінники ______________________________________________________ 6. зменшувати попит на його товар-супутник _______________________________________ ____________________________________________________________________________ 7. ще одна одиниця продукції ____________________________________________________ 8. робити зважені вибори ________________________________________________________ 9. нецінові визначники попиту ___________________________________________________ 10. за будь-якою ціною ___________________________________________________________ 11. обернено пропорційна залежність між ціною та величиною попиту __________________ ____________________________________________________________________________ 12. крива попиту опускається полого _______________________________________________ 13. які знаходяться між цінами ____________________________________________________ 14. комбінація ціни та кількості ___________________________________________________ 15. не зазнаючи зменшення товарообороту/обсягу продажу ____________________________ ____________________________________________________________________________ 16. додаткові (особливі) зусилля ___________________________________________________ 17. зміна ринкової ціни ___________________________________________________________ 18. різнитися між товарами _______________________________________________________ 19. незначна зміна ціни/в ціні _____________________________________________________ 20. не вважатися товаром першої необхідності _______________________________________ 21. сутність та рівень відносин ____________________________________________________ Exercise 4. Match these adjectives and nouns/noun phrases as they occur together in the text. Translate the expressions they make into Ukrainian.
Exercise 5. Match these nouns/noun phrases, prepositions (if necessary) and nouns/noun phrases as they occur together in the text. Translate the expressions they make into Ukrainian.
Exercise 6. Match the verbs/verbal phrases, prepositions (if necessary) and nouns/noun phrases as they occur together in the text. Translate the expressions they make into Ukrainian.
Exercise 7. Copy out from the texts the sentences containing the following words and word-combinations and translate these sentences into Ukrainian. 1. consumer demand – ____________________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 2. the key to distribution – _________________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 3. will be apt to substitute – ________________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 4. to the economists – _____________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 5. the non-price determinants – _____________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 6. the demand curve represents – ____________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 7. it enables economists – __________________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 8. but only at a lower price – _______________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 9. will discourage more consumers – __________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 10. more insensitive to price changes – ________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 11. substituting another product for it – ________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ 12. essential goods – _______________________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Exercise 8. Choose words and word-combinations that have the same or similar meaning to the words listed below. More than one is possible. 1. основа (2) ____________________________________________________________________ 2. споживчий попит (3) – _________________________________________________________ 3. зниження (3) – ________________________________________________________________ 4. задовольняти потребу (3) – _____________________________________________________ 5. реагувати (2) – ________________________________________________________________ 6. знижена ціна (3) – _____________________________________________________________ 7. зазнавати збитків (3) – _________________________________________________________ 8. мати схильність (2) – __________________________________________________________ 9. значна зміна (2) – _____________________________________________________________ 10. задовольнити попит (3) – _______________________________________________________ 11. вимагати (3) – ________________________________________________________________ 12. зменшувати (3) – ______________________________________________________________ 13. товар (3) – ___________________________________________________________________ 14. потреба (2) – _________________________________________________________________ 15. товари першої необхідності (3) – ________________________________________________ 16. зниження ціни (3) – ___________________________________________________________ 17. за різними цінами (2) __________________________________________________________ 18. додаткове задоволення (2) – ____________________________________________________ 19. помірна зміна (3) – ____________________________________________________________
Exercise 9. Replace the words or word combinations in bold type with their synonyms. 1. When two goods satisfy similar needs a change in the price of one item will result in a shift in the demand for a substitute. 2. Two goods are described as substitutes when a price cut of one good results in a fall in the demand for the other. 3. If the price of one of the substitutes diminishes while the prices of other goods remain the same, people tend to substitute the cheaper good for goods they would have bought otherwise. 4. If a change in price leads to a great change in quantity demanded, the product is said to have elastic demand. 5. Demand curve slopes downward from left to right showing the quantity demanded for a particular product at various prices. 6. If prices are high, the quantity demanded will diminish and if prices are low, the quantity demanded will increase. 7. Diminishing marginal utility explains that after consuming a certain amount of a commodity a person gains less and less satisfaction from each extra purchase of this commodity. 8. Demand is considered to be inelastic when a price change of a commodity leads to a modest change in consumer demand. 9. Demand for necessities is always inelastic. Exercise 10. Translate the words in brackets into Ukrainian. 1. The law of (спадної граничної корисності) says that the greater the quantity of any good consumed, (тим менша гранична корисність) derived from consuming (ще однієї одиниці) of the same good. 2. (Шкала попиту) shows the quantity of a product that buyers would be willing and able to purchase (за різними можливими цінами) in a given time, (за умови, що усі інші речі залишаються однаковими). 3. (Крива попиту) is (графічне зображення) of the relationship between a price of a good and the quantity of that good (яку потребують покупці). 4. The demand for one good can be affected by the price (інших споріднених товарів). 5. If any of the factors that cause (попит на товар) to increase or decrease, occur (величина попиту) at any particular price (буде вищою або нижчою). 6. Change in demand results in a shift of the demand curve (наліво або направо in response to a change (одного з нецінових факторів), the good's price remaining constant. 7. To the economists, (цінова еластичність попиту) is the degree to which the demand is affected by a change (ціни товару). 8. The most important circumstance that (впливає на еластичність попиту) is (наявність взаємо замінюваних товарів). Exercise 11. Pair the halves of the sentences and write the completed sentences. Translate them into Ukrainian.
Exercise 12. Match each term in column A with its definition in column B.
Exercise 13. Translate the sentences into English using the active vocabulary.
Exercise 14. Answer the following questions. 1. Why is the theory of supply and demand considered one of the most fundamental concepts of economics? 2. What is demand? 3. What factors alter consumer demand? 4. What goods are considered to be related? 5. What goods are called substitutes? 6. What are complementary goods? 7. What is the item’s usefulness? 8. What does the law of diminishing marginal utility explain? 9. Why does demand describe the behavior of buyers? 10. What does the law of demand state? 11. What relationship does the law of demand describe? 12. What non-price factors are covered by the “all other factors remaining equal” clause in the law of demand? 13. Why does the law of demand have an inverse relationship? 14. What does demand schedule show? 15. What is demand curve? 16. What does the demand curve represent? 17. Why do economists use such economic model as demand curve? 18. What causes the demand for an economic product to increase or decrease at each and every price? 19. What is the difference between demand and quantity demanded? 20. What does a change in price lead to? 21. How does the price of goods or services affect the quantity that buyers demand? 22. How do factors other than a good’s price affect demand? 23. What is the difference between a change in quantity demanded and a change in demand? 24. What is elasticity as an economic concept? 25. Why does elasticity vary among products? 26. Why does a price increase of a product discourage consumers to buy it? 27. When does a price change bring about only a slight change in the quantity demanded? 28. When does a price change cause a sharp change in the quantity demanded? 29. What goods are called necessities? 30. What does the price elasticity of demand mean? 31. What factors affect elasticity of demand? 32. What demand is considered as elastic? 33. What goods and services is demand elastic for? 34. When demand is said to be inelastic? 35. What is the difference between elastic and inelastic demand? 36. What goods and services is demand inelastic for? 37. Why is demand for necessities inelastic?
Questions for economic reasoning and discussion 1. Plot a demand curve according to a demand schedule given below and explain what a demand curve for a hypothetic product shows.
2. If you owned an ice cream shop at a seaside resort and additional ice cream shops are opening in your area because of increasing prices, how would you take advantage of the use of substitute products to compete more effectively? How would you make use of the concept of demand elasticity in making decisions whether or not to raise prices for your specialty item such as shakes, sundaes, and banana splits? 3. Discuss the process through which chicken has replaced beef as the leading meat item in Ukraine. Has there been a shift in demand for beef or chicken or both? 4. Some people would buy more of a good (such as jewelry or furs) at a high price than at a low price. This results in upward-sloping “demand” curve. Would such a curve an exception to the law of demand? Explain. 5. What would happen to the market demand curve for steak as a result of each of the following: a. An increase in the average level of income. b. An increase in the number of families. c. A successful advertising campaign for veal and pork. d. An increase in the prices of veal and pork. e. A decrease in the prices of veal and pork.
6. What would happen to the demand for Pepsi-Cola if the price of Coca-Cola were doubled? Why would it happen? 7. Public transit systems often raise their rates to offset increased costs. Some of these systems find that their total revenues decline in the first weeks after the rate increase and then rise. What does this suggest about the elasticity of demand for these services? 8. Assume you sell TVs. According to the concept of diminishing marginal utility, people with one TV set would be less eager to purchase or rent a second and third set. How would you overcome this sales resistance? 9. Below is a list of consumer goods and services. Determine whether an item has an elastic or inelastic demand. Indicate the most important reason from the list below.
Reasons:necessity, luxury, many available substitutes, a few available substitutes, inexpensive, expensive, easy to delay purchase, difficult to delay purchase.
10. Choose the right variant. Only one is possible.
1. Consider the price and demand for flower vases. The price of freshly cut flowers goes up sharply. Which of the following would you expect to happen? a. The demand curve for flower vases will shift to the left and their price will rise. b. The demand curve for flower vases will shift to the left and their price will fall. c. The demand curve for flower vases will shift to the right and their price will rise. d. There will be a movement along the demand curve for flower vases and price will go down. 2. Which of the following would cause the demand curve for a good to shift to the left? a. A rise in the price of the good. b. A decrease in the tax imposed by the government on the good. c. An increase in the supply of the good. d. A decrease in the price of a substitute good.
3. According to the law of demand, when the price of a good increases, a. people will choose to purchase less of that good and more of other. b. people will provide more of that good. c. people will choose to purchase more of that good and less of other. d. people will provide less of that good.
4. What does the law of demand state? a. As incomes increase, people consume more of all goods. b. The demand for a good increases with the number of consumers in the market. c. As the price of a good declines, consumers purchase more of that good. d. The supply of a good increases in proportion to the demand for it. 5. Which of the following will move the demand curve for pork to the right? a. A reduction in the cost of corn that is used to feed pigs b. A reduction in the price of pork c. An increase in the price of beef d. All of the above 6. Which of the following provides an example of complementary goods? a. Pepsi and Coca-Cola b. French fries and catsup (кетчуп) c. Milk and orange juice d. Beef and pork 7. The demand schedule is: The demand schedule is: The demand schedule is:The demand schedule is a. a a curve that shows the relationship between price and quantity demanded,acurve that shows the relationship between price and quantity demanded, all other factors being the same. b. a a curve that shows the relationship between price and quantity demanded,atable that shows the relationship between price and quantity demanded, all other factors being the same. c. a a list of time periods during which the quantity of a good is demanded.alist of time periods during which the quantity of a product is demanded. d. the order in which individual consumers arrive to demand goods or services. 8. Which of the following would tend to have an inelastic demand curve? a. Complementary goods b. Luxuries c. Goods with substitutes d. Necessities 9. Which of the following best describes a product with elastic demand? a. Consumers buy almost the same quantity of this product at a low price as they do at a high price. b. A relatively large price cut is necessary to convince consumers to buy a little more of this product. c. When the price of this product is reduced, consumers tend to buy more of it. d. A relatively small price reduction will cause consumers to buy a lot more of this product. 10. The demand for a product tends to be elastic if a. the product has a large number of good substitutes. b. consumers generally spend a small fraction of their income on the product. c. the product is regarded as a necessity. d. the product has few good substitutes
Общий взгляд на архитектуру UNIX
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