English for fun and thought

Interpreting cartoons: Study the cartoon and answer the questions:

 

 

1. What does the cartoon depict?

2. What economic observation does the cartoon illustrate?

a) Prices are determined by interaction of supply and demand.

b) A change in the supply of a particular item shifts the entire supply curve to the left or right.

c) Supply and demand always work together in the real world.

d) Any changes in either demand or supply affect the equilibrium price.

e) Rising prices signal producers to increase supply more and consumers to decrease demand.

3. What makes the cartoon funny?

 

Understanding economic jokes:

1) One renowned economist returns to visit his university where he earned his degree 10 years ago. He talks to some students about the lectures, the textbooks, the exams... these days. Much to his surprise, all of the questions in today's exams are exactly the same as the ones he answered a decade ago. He asks his professor about this rather bizarre phenomenon, to which the professor replies: "The questions stay the same, true enough, but the answers are constantly changed."

 

2) - How many Keynesian economists does it takes to change a light bulb?
- All of them. Because that will generate employment and therefore more consumption, shifting the aggregate demand to the right.

 

3) 1st rule of economy: for one economist there is an opposite school of thought economist.

2nd rule of economy:  both are wrong.

 

4) President Truman said that economists were always unsure of themselves, saying "...on the other hand...". He said he needed to hire some one-handed economists.

 

Perceiving quotes about economists and economy:

 

· Teach a parrot the terms ‘supply and demand’ and you’ve got an economist.(Thomas Carlyle)

· Economics is extremely useful as a form of employment for economists.  (John Kenneth Galbraith)

 

Unit 7

 

PERFECT COMPETITION

 

Pre-reading competency focus

 

In this unit read to learn about perfect and imperfect market structures.

 

Previewing: B usinesses can be categorized by the structure of their markets. The amount of competition a business faces determines its market structure. One of the basic market structures is called perfect competition.

 

Predicting: How can supply and demand affect perfect competition?

 

Vocabulary previewing: Match the words (A) and their definitions (B)

A

(1) market structure, (2) perfect competition, (3) monopoly, (4) barriers to entry,

(5) oligopoly, (6) product differentiation, (7) monopolistic competition

B

(a)    a market situation controlled by a single supplier of a good or service that

      has no close substitute,

(b)    the extent to which competition prevails in particular markets,

(c)    a market situation in which there are numerous buyers and sellers; no

    single buyer or seller can affect price,

(d)    a market situation in which a large number of sellers offer similar but

    slightly different products; each seller has some control over price,

(e)    obstacles to competition that prevent others from entering into a market,

(f)    industry dominated by a few suppliers who exercise some control over  

    price,

(g) manufacturers try to differentiate their product from others by emphasizing

minor differences in quality and features

Skimming: Perfect competition is an idealized type of market structure. Look through the text and say what types of imperfect competition do most industries in the market economy represent.