Ғ. Н.Қисметова Ағылшын тілі грамматикасы
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- UNIT 11 Demand and supply Text A. The law of Demand.
| General understanding
1. What is, according to the text, microeconomics? 2. What is meant by “economics in the small’? 3. What economic phenomena are о microeconomics attentions? 4. Where is microeconomic theory used? 5. What is “optimization”? 6. What is the concept of the theory of consumer? 7. What is the major difference between the theory of consumer and the theory of producer? UNIT 11 Demand and supply Text A. The law of Demand. emand is a key concept in both macroeconomics and microeconomics. In the former, consumption is mainly a function of income, w ereas in the latter, consumption or demand is primarily, but not exc usive y, a function of price. Tbis analysis of demand relates to microeconomic theory. The th eo^ of demand was mostly implicit in the writings of classical ore the late nineteenth century. Current theory rests on the n s S S j r u i ? Marshall (1890), Edge worth (1881), and Pareto (1896). Marshall viewed demand in a cardinal context, in which utility 124 could be quantified. Most contemporary economists hold the approach taken by Edge worth and Pareto, in which demand has only ordinal characteristics and in which indifference or preferences become central to the analysis. Much economic analysis focuses on the relation between prices and quantities demanded, the other variables being provisionally held constant. At the various prices that could prevail in a market during some period of time, different quantities of a good or service would be bought. Demand, then, is considered as a list of prices and quantities, with one quantity for each possible price. With price on the vertical axis and quantity on the horizontal axis, the demand curve slopes downward from left to right, signifying that smaller quantities are bought at higher prices and lager quantities are bought lower prices. The inverse relation between price and quantity is usually called the law of demand. The law rests on two foundations. One is the theory of the consumer, the logic of which show that the consumer responds to lower prices by buying more. The other foundation is empirical, with innumerable studies of demand in actual markets having demonstrated the existence of downward-sloping demand curves. Exceptions to the law of demand are the curiosa of theorists. The best- known exception Geffen effect — a consumer buys more, not less. Of a commodity at higher prices when a negative income effect dominates over the substitution effect. Another is the Vein effect - some commodities are theoretically wanted solely for their higher prices. The higher these prices are, the more the use of such commodities fulfills the requirements of conspicuous consumption, and thus the stronger the demand for them. жүктеу/скачать 3.76 Mb. Достарыңызбен бөлісу:
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