Unit 8 supply and demand (2)

Text 3-4 (pages 74 - 76)

1. Read the text “Behind the Demand Curve” and choose the correct answer, A, B, C or D according to the text.

1) The demand for cars usually decreases

A. as a result of petrol price rise.

B. with a rise in tube fares.

C. when the price of related goods remains constant.

D. instead of a decrease in the demand for buses.

2) Technological advances

A. encourage an increase in the demand for complements to the new product.

B. prevent from purchasing the lower-price new product.

C. affect the demand for the time goods

D. relate to the increase in the demand for substitutes for the new product.

3) When incomes rise

A. the demand for normal goods decreases.

B. households typically spend a little more on inferior goods.

C. an increase of consumption tends to occur.

D. consumer preferences become less affordable.

1. Complete each sentence with the correct ending, A-J, below.

1. Although each good is unique, it has substitutes –

2. When a price rises and all other influences on buying plans remain unchanged, the price rises

3. Faced with a higher price and an unchanged income, people

4. When income increases, consumers, buy more of most goods, and when income decreases,

5. Although an increase in income leads to an increase in the demand for most goods,

6. A rock music fanatic has a much greater preference for CD-Rs than does a tone-deaf technophobic, as a consequence,

7. If the price of a substitute for a CD-R rises,

A. will be one of the goods that people buy less of.

B. other goods that can be used in its place.

C. relative to people’s income.

D. cannot afford to buy all the things they previously bought.

E. the size and the age structure of the population.

F. consumers buy less of most goods.

G. the current demand for computers is less.

H. it does not lead to an increase in the demand for all goods.

I. even if they have the same incomes, their demands for CD-Rs will be different.

J. people buy less of the substitute and more CD-Rs.

1. Complete the text using the list of words from the box below

The prices of productive resources _____1_____ supply. The easiest way to see this influence is to think about the _____2_____ curve as a minimum-supply-price curve. If the price of a productive resource _____3_____, the lowest price a producer is willing to _____4_____ rises, so supply decreases. For example, during 2001, the price of jet fuel _____5_____ and the supply of air transportation decreased. _____6_____, a rise in the minimum _____7_____ decreases the supply of hamburgers. If the wages of disc _____8_____ rise, the supply of CD- Rs decreases.

1. Do the following statements agree with the information given in the text “Behind the Demand Curve”?

Use TRUE if the statement agrees with the information

FALSE if the statement contradicts the information

NOT GIVEN if there is no information on this

1. New technologies create new products and lower the costs of producing existing products.
2. Demand depends on preferences.
3. The price of related goods and the demand for a certain product are independent.
4. Inferior goods are precisely low-quality ones.
5. The precise definition of complement cannot be formulated.

5. Which of the following best describes the main idea of the text “Behind the Demand Curve”?

Choose the correct letter A, B, C or D.

1. Related goods.
2. Complements and substitutes definitions.
3. The other things essence.
4. Consumer incomes and preferences.

LISTENING (Unit 8 page 78 – 79)

1. Choose the correct word in brackets to complete the summary of the lecture.

When any (influence/dependence) on buyers' planned purchases changes, other than the price of the good, there is a change in demand and the demand curve (shifts/slopes). Demand (increases/decreases) and the demand curve shifts rightward if the price of a substitute (rises/falls), the price of a complement (rises/falls), Demand decreases and the demand curve shifts (rightward/leftward) if the price of a substitute (rises/falls), the price of a complement (rises/falls).