Correct false statements

DEMAND

DEMAND

UNIT 3

Comprehension check

1. What is an ‘economic model’ and with what purpose is it constructed?

2. What is the purpose of constructing a long-run growth model?

3. What important simplification does the long-run growth model rest upon?

Grammar: Expressing the future action

Assignment 1. Read and learn the following words and phrases.

issue – питання;

willingness – бажання;

ability – здатність;

quantity – кількість; ~ demanded – бажана кількість; кількість, на яку існує попит;

to purchase – купувати;

equal – рівний; all else being equal – при всіх інших рівних умовах; to be equal – дорівнювати;

to vary – змінювати(ся); варіювати(ся);

inversely – обернено пропорційно;

to decrease – зменшуватись; decrease – зменшення;

to increase – збільшуватись, зростати; increase – зростання;

vice versa – навпаки;

to affect – впливати;

item – виріб, товар;

elasticity – еластичність, гнучкість; elastic – гнучкий; inelastic – негнучкий;

relatively – відносно;

effect – результат, ефект, дія;

revenue – доход, прибуток; total ~ – загальний прибуток; test ~ – оцінка прибутку; тест на прибутковість;

to multiply – множити; multiplied by – помножений на...;

necessity – товар першої необхідності;

substitute – замінник; ~ goods – товари-замінники;

to delay – відкладати, відстрочити;

satisfied (demand) – задоволений (попит); unsatisfied – незадоволений;

to influence – впливати;

availability – доступність; наявність;

complementary (goods) – додаткові товари;

household – сім’я; господарство;

expectation – очікування;

Assignment 2. Read and translate the following text.

The issue of demand is an important part of microeconomics. Demand is a consumer’s willingness and ability to buy a good or service at a particular time and place. The law of demand describes the relationship between prices and the quantity of goods and services that would be purchased at each price. It says that all else being equal, more items will be sold at a lower price than at a higher price. Generally speaking, demand varies inversely with price, i.e. the quantity demanded will decrease as the price increases, and vice versa.

How much a change in price affects the quantity demanded is described by elasticity. When the demand for an item is inelastic, a change in price will have relatively small effect on the quantity demanded. When the demand for an item is elastic, a small change in price will have a relatively large effect on the quantity demanded.

Elasticity can be measured by the “ revenue test”. Total revenue is equal to the price multiplied by the number of units sold. If total revenue increases following a price decrease, demand will be elastic. If the price decrease leads to a decrease in total revenue, the demand for the product will be described as inelastic.

The demand for some goods and services will be inelastic for one or more of the following reasons:

· They are necessities.

· It is difficult to find substitutes.

· They are relatively inexpensive.

· It is difficult to delay a purchase.

Demand may be satisfied, and so the actual quantities bought equal demand. On the other hand, some demand might be unsatisfied, and so the actual quantities bought will be less than the buyers are willing to purchase.

The total quantity demanded is referred to as the market demand. Some factors may influence the total market demand for a product:

· the price of a product. Demand is higher at a lower price;

· the price and availability of complementary goods;

· the price and availability of substitute goods;

· the size of the household’s income;

· tastes, fashions, attitudes towards a product;

· consumer expectations about future market conditions;

· the distribution of income among the population.

Assignment 3. Answer the following questions.

1. What does the term ‘demand’ mean?

2. What relationship does demand describe?

3. What does the law of demand say?

4. How does demand vary with price?

5. What does elasticity describe?

6. How can elasticity be measured?

7. When do we say that demand is elastic / inelastic?

8. Why is the demand for some goods and services inelastic?

9. When do we say that demand is satisfied / unsatisfied?

10. What do we call ‘market demand’?

11. What factors may influence market demand?

Assignment 4. Learn the difference in stress. Train the stress in the following sentences.

Decrease - n. [ ́di:kri:s], v.[dí ́kri:s]

Increase – n. [ ́inkri:s], v. [in ́kri:s]

The quantity demanded will decrease (v) as the price increases (v).

The total revenue increases (v) following a price increase (n).

The price decrease (n) leads to the decrease (n) in total revenue.

Assignment 5. Translate into English.

Бажання та здатність споживача; в певний час та в певному місці; говорячи в загальному; ціна, помножена на кількість проданих одиниць; зниження ціни веде до зменшення загального прибутку; відносно недорогий; ринковий попит; смаки; відношення до продукту; очікування споживачів; розподіл прибутку серед населення.

Assignment 6. Translate into Ukrainian.

The issue of demand; at each price; the law says that…; demand varies inversely with price; a relatively small / large effect on…; to affect the quantity demanded; a price decrease; prices decrease (very slowly); for one of the following reasons; actual quantities bought; the size of the household’s income; future market conditions; on the other hand.

Assignment 7. Match the synonyms. Use any 5 words in the sentences of your own.

A: to purchase, to affect, to indicate, inversely, revenue, household;

B: to denote, to buy, to influence, family, vice versa, income.

Assignment 8. Supply the opposites from the text. Use any 5 words in the sentences of your own.

To purchase, elastic, expensive, decrease, unequal, satisfied, more.

Assignment 9. Fill in the blanks with an appropriate word or phrase from the box below. Translate the sentences.

necessities, complementary goods, to delay, market demand, substitutes

1. When two goods satisfy similar needs, like ball pen and gel ink pen, they are described as …. 2. … for a certain product changes with the change in fashion. 3. People buy … at any price, so the demand for them is inelastic. 4. Goods that are often consumed together are referred to as …. 5. When your car is running out of gas it is difficult … a purchase of gas at the nearest gas station, even if the price is too high.

Assignment 10. Match the term with its definition. Provide examples of each kind of goods.

Complements (complementary goods)	Goods that are necessary or needed.
Substitutes (substitute goods)	Goods that last a relatively long time.
Necessities	Goods that ‘go together’; a decrease in the price of one results in an increase in demand for the other, and vice versa.
Durable goods	Goods that can serve as replacement for one another; when the price of one increases, demand for the other goes up.

Assignment 11. State whether the following statements are true (T) or false (F). If you agree, begin with:You are quite right; I quite agree with you; Exactly; Quite so.

If you partially disagree, begin with: You are not quite right; True, but…; It is true in a way, but…

If you find the sentence completely wrong, begin with: I’m afraid, that’s wrong; I think you are mistaken; On the contrary; That’s not quite so.

(T) (F) People don’t change their buying habits when the price of something that is relatively inexpensive is increased or decreased.

(T) (F) It is difficult to find substitutes for Cola in case Cola price is going to

double.

(T) (F) As there are few substitutes for milk, the demand for it is elastic.

(T) (F) When you plan to buy any durable product, say a new TV set, you compare the prices of substitutes.

(T) (F) Necessities are bought at any price.

Assignment 12. Make up questions to the words underlined.

1. He spent a lot of time on calculating the total revenue for the quarter. 2. Demand varies inversely with price. 3. The total quantity demanded is referred to as the market demand. 4. As they expected the future increase in demand, they expanded their production. 5. Price increase on relatively inexpensive products doesn’t affect people’s buying habits.

Assignment 13. Insert the prepositions from the box below.

at (3), in, on (2), with, of (2), by(2)

1. The price factor has a small effect … necessities. 2. Does demand vary directly or inversely … price? 3. I’ll see you … 3 p.m. … the office. 4. Everybody knows that more items will be sold … a lower price than … a higher price. 5. They increased their prices … 3%. 6. To calculate the total revenue we must multiply the price … the number … the units sold. 7. What is the effect … price increase... the total revenue?

Assignment 14. Study the graph belowthat shows the relationship between the price of a candy bar and the quantity of candy bars demanded.

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