Supply, Demand and Market Price

LESSON 3. The aim of the lesson is to teach you to scan various articles in order to grasp the main idea and locate details across the text. You’ll go on learning to articulate your ideas and substantiate your views on economic issues.

1. Vocabulary study. Match the words with their meanings and provide their Russian equivalents:

2. Back translation practice (to be translated at home in writing!!!):

· Their investments were not attuned to their future goals.

· The workers conceded on salary increases in order to retain their retirement benefits.

· With the closing of several of its branch offices, the economic problems of the company were quite conspicuous.

· If production costs remain constant and the market demand increases, the company can count on higher profits.

· Sociologists tend to be more interested in contemporary problems than they are in the past.

· Since conventional approaches were not proving successful, the company was experimenting with a completely new strategy.

· Parents of college-aged children find their savings diminishing because of the high cost of university education today.

· The introduction of high quality, low cost foreign goods into the local market upset the equilibrium of the economy.

· With recent court decisions guaranteeing their rights, that interest group is exerting more political influence.

· The research division of the company functions as a laboratory.

· Following a long, successful career, she looked forward to her retirement and more time for leisure.

· Though single-owner businesses remained profitable, their influence upon the economic policies of the city was marginal.

· People can live successful lives if they learn how to maximize their potential and not let their weaknesses get in the way.

· Unfavourable reports on the new product stifled consumer interest.

· When interest rates at the banks are low, people have the tendency to spend their money rather than put it into savings.

· Though he graduated at the top of his class, he never fulfilled his potential as a lawyer.

3. Choose a few utterances from the above list that can be used as important rules for us to follow in our life, and provide a sentence or two of agreement or disagreement.

E. g., In order to retain their retirement benefits, people ought to concede on salary increases. They should think of future expenses when retired.

4. Scan the article “Adam Smith and the Wealth of Nations”. Sum up the main ideas conveyed in the article and answer the following questions:

1) With which group are Adam Smith’s ideas most in agreement: the mercantilists or the physiocrats?

2) What is another term for Smith’s invisible hand? How does it operate in a nation’s economy? How can you project these ideas on to what is going on in our country today?

5. A market economy is one that relies upon buyers and producers to determine production, consumption, investment and savings.

* Think of three examples of new products that have come on the market in your country because of consumer demand. As these products have been on the market, have they become more expensive or less expensive?

* Think of three products or services that have gone off the market or become difficult to obtain in your country because of declining demand.

6. Look through the text “Supply and Demand Revisited” and do the following tasks:

1) Answer the following questions: What product is used to demonstrate the principle of supply and demand? What is the specific market that is discussed?

2) Write a definition for the following terms and suggest Russian equivalents for: diminishing marginal utility; marginal costs of production; equilibrium price and quantity; excess supply; demand schedule; supply schedule; the market price.

3) In the final sentence of the article, the author says that the equilibrium of price and quantity will remain the same forever “unless something else changes.” Identify what specific changes might alter the equilibrium.

4) If you were to rewrite this article for our country, what product and what market would be more appropriate for you to use to demonstrate supply and demand?

7. Organizing our thoughts and testing our ideas. Pair up and discuss possible answers to the questions below and report back to the whole group on the ideas exchanged by you.

1) What affects the demand for goods and services in a market economy?

2) What affects the supply of a particular good or service?

3) How do demand and supply interact to determine prices?

4) How do profits, economic self-interest and other incentives keep a market economy growing? Give specific examples.

Vocabulary study. Provide Russian equivalents for the following English ones:

*** the price of a good or service; to slope upward/ downward; large quantities of goods and services; diminishing marginal utility; to make an additional purchase; at a lower/ higher price; a hardware store; to purchase; storage space; to increase production; to make a profit from sales/ something; the selling price; to go up/ down; to be in conflict; to reach an agreement; equilibrium prices; to remain unchanged; to stay informed; excess supply; to reduce prices; to work in reverse; financial loss; to meet the market’s demand; legitimacy

Date: 2015-01-29; view: 1800