Unit 4.

DEMAND AND SUPPLY

TEXT A: Demand and supply

TEXT B: The role of price
TEXT C: Two factors that affect labor supply and demand
BUSINESS COMMUNICATION: Making an appointment
GRAMMAR: The Past Prefect Tense. The Past Perfect Continuous Tense. Past Tenses Review.

A system is in equilibrium when the forces constituting it are arranged in

such a way as to compensate each other, like the two weights pulling at the
arms of a pair of scales.
Rudolf Arnheim (1904 – 2007),
German-born author, psychologist.

LEAD-IN
1. How different are expectations of sellers and buyers in the market? What are these expectations
reflected in?
2. How does the market take into account sellers’ and buyers’ needs?
3. How do consumers and producers react to changes in the market?
4. What balances the amount of a product buyers want to buy with the amount sellers want to sell?
5. What do you think is the function of prices? What could happen if there were only fixed prices?
6. What other factors, apart from prices, affect the behavior of suppliers and demanders?

PRE-TEXT EXERCISES
 A. Reading drills
Ex.1. Practice reading the following words.

aw [ɔ:] law, draw, saw, strawberries, raw, paw, pawl, bawl

ow [au] how, power, down, town, now, plow, mow, howl, scowl
ow[əu] low, show, slow, own, know, nowt
ou[ʌ] enough, country, double, touch, young, tough, rough
ea [i:] increase, cheaply, reach, peach, please, decrease, mean, each
ea [e] heavily, health, measure, pleasure, bread, breakfast, head
er [з:] refer, prefer, term, perfect, verb, service, certain
ur[з:] purchase, turn, hurt, burn, Thursday, nurse, curtain
c [s] society, choice, price, nice, produce, decision, force, once
c [k] consumer, cost, comprise, calm, conference, cooperative

Ex. 2. Read the words in the groups below. Pay attention to the word stress.
a) words with the stress on the first syllable:
influence, merely, therefore, equal, basically, willingness, preference, weigh, heavily, household,
income, maximize, possible, budget, impact, effort, concept, specify, quantity, purchase, demonstrate,
upward, revenue, temporary, permanent, obviously, compromise, variable, calculus, relative, offset,
volume, vertical, curve, substitute;
b) words with the stress on the second syllable:
society, allow, consume, conventional, determine, afford, demand, behavior, desire, ability, condition,
affect, decision, utility, consider, significant, analogous, depending, amount, available, effective,
relationship, efficient, forgo, consumption, increase, equipment, facilities, responding, impose,
necessity, incentive;
c)polysyllabic words with the main and secondary stress:
economic, competition, microeconomics, combination, independently, represent, fundamental,
correlation, allocation, opportunity, unexpected, equilibrium, individual, fluctuation, inelastic.

B. Word formation
Ex. 3. Make up adjectives as in the model.
Model: noun+suffix –(c)ialor –(t)ial→ adjective
e.g. society – social
Adverb, commerce, essence, face, race, finance, potency, credence, prudence, president, torrent.

Ex.4. Make up nouns as in the model.

Model: adjective+suffix–ness→noun
e.g.ready – readiness
Ill, fit, dark, awkward, lazy, hard, soft, ready, calm, dark, kind, abrupt, absurd, awful, bitter.
Model: verb+suffix –ance or -ence →noun
e.g. appear- appearance, insure- insurance
Depend, ignore, maintain, prefer, resist, insist, interfere, assure, accept, absorb, deliver, clear.
What other adjective and noun suffixes do you know?
Find in the text other adjectives and nouns and translate them.

TEXT A: DEMAND AND SUPPLY

Key terms: supply, demand, buying behaviour, microeconomics, decision-making unit, effective
demand, consumer preferences, purchasing choice, utility, buying decision, demand relationship,
supply relationship, opportunity cost, the Law of Supply, the Law of Demand, market equilibrium,
elasticity, quantity demanded, quantity supplied.
Other words and expressions: to make economic choices, to consume goods and services, under
condition of competition, by way of operation, to determine the price of, to be equal to, to refer to, the
ability and the willingness to pay, to be affected by, a significant impact, to be available for, the
backbone of a market economy, the correlation between, to underlie the forces, allocation of resources,
to forgo the consumption of something, to increase revenue, the long-term levels of demand,
equipment and production facilities, to shape the market, to reach compromise.
Linking words and phrases: let’s have a close look at; to sum up; in other words; as a result; unlike;
however; so far; obviously; in most cases; thus; so; conversely; on the other hand; we would say.

All societies necessarily make economic choices. Society needs to make choices about what
should be produced, how those goods and services should be produced, and who is allowed to consume
those goods and services. For conventional economics, the market answers these questions by way of
the operation of supply and demand. Under conditions of competition, where no one has the power to
influence or set price, the market (everyone, producers and consumers together) determines the price of
a product, and the price determines what is produced, and who can afford to consume it.
The terms supply and demand do not mean the amount of goods and services actually sold and
bought; in any sale the amount sold is equal to the amount bought, and such supply and demand,
therefore, are always equal.
Let’s have a closer look at both of them.
In microeconomics, demand refers to the buying behaviour of a household. What does this
mean? Basically, micro economists want to try to explain three things:
1. Why do people buy what they buy?
2. How much are they willing to pay?
3. How much do they want to buy?
Demand is comprised of three things.
 Desire
  Ability to pay
 Willingness to pay
It is not enough to merely want or desire an item. One must show the ability to pay and then
the willingness to pay. If all three conditions are not met then the demand is not real.
Each household, or small-scale decision-making unit, is affected by different factors when
making choices about what to buy and how much to buy. Consumer preferences weigh heavily in a
household's buying decisions. Another factor that affects such decisions is income: a millionaire and an
average citizen will have very different purchasing choices, since they have different budgets to work
on. All buyers will try to maximize their utility, that is, make themselves as happy as possible, by
spending what money they have in the best way possible. By considering both their preferences and
their budget, they ensure that they end up with the best combination of goods possible. Because the
household is such a small unit, no household has a significant impact on the market, and so the actions
of any single household is its best effort to react to the market price and the goods available.
At the other side of every transaction is a seller. Economists refer to the behaviour of sellers as
the market force of supply. It is the combined forces of supply and demand that make up a market
economy. Firms operate independently of each other, making decisions about what to sell, and how
much to sell, depending on the price. How do firms make their selling decisions? Once they have
decided what to sell, (a decision they make is based on what they believe buyers will want to buy),
their decision is then influenced by the market price of the goods.
Supply and demand is perhaps one of the most fundamental concepts of economics and it is the
backbone of a market economy. Demand refers to how much (quantity) of a product or service is
desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a
certain price. The relationship between price and quantity demanded is known as the demand
relationship. Supply represents how much the market can offer. The quantity supplied refers to the
amount of a certain good producers are willing to supply when receiving a certain price. The
correlation between price and how much of a good or service is supplied to the market is known as the
supply relationship. Price, therefore, is a reflection of supply and demand.
The relationship between demand and supply underlie the forces behind the allocation of
resources. In market economy theories, demand and supply theory will allocate resources in the most
efficient way possible. How? Let us take a closer look at the Law of Demand and the Law of Supply.

A. The Law of Demand

 The Law of Demand states that, if all other factors remain equal, the higher the price of a
good, the less people will demand that good. In other words, the higher the price, the lower the
quantity demanded. The amount of a good that buyers purchase at a higher price is less because as the
price of a good goes up, so does the opportunity cost of buying that good. As a result, people will
naturally avoid buying a product that will force them to forgo the consumption of something else they
value more.

B. The Law of Supply

Like the Law of Demand, the Law of Supply demonstrates the quantities that will be sold at a
certain price. But unlike the Law of demand, the supply relationship shows an upward slope. This
means that the higher the price, the higher the quantity supplied. Producers supply more at a higher
price because selling a higher quantity at a higher price increases revenue.

C. Equilibrium
 So far, we've looked at supply, we've looked at demand, and the main question that now arises
is: "How do these two opposing forces of supply and demand shape the market?" Buyers want to buy
as many goods as possible, as cheaply as possible. Sellers want to sell as many goods as possible, at the
highest price possible. Obviously, they can't both have their way. How can we figure out what the price
will be, and how many goods will be sold? In most cases, supply and demand reach some sort of
compromise on the price and quantity of goods sold: the market price is the price at which buyers are
willing to buy the same number of goods that sellers are willing to sell. This point is called market
equilibrium. Because supply and demand can shift and change, equilibrium in a standard market is
also fluid, responding to changes in either market force.
When supply and demand are equal (i.e. when the supply function and demand function
intersect) the economy is said to be at equilibrium. At this point, the allocation of goods is at its most
efficient because the amount of goods being supplied is exactly the same as the amount of goods being
demanded. Thus, everyone (individuals, firms, or countries) is satisfied with the current economic
condition. At the given price, suppliers are selling all the goods that they have produced and consumers
are getting all the goods that they are demanding.
In the real market place equilibrium can only ever be reached in theory, so the prices of goods and
services are constantly changing in relation to fluctuations in demand and supply.
D. Elasticity of demand and supply
 A very important concept in understanding supply and demand theory is elasticity. Robert
Pindyck and Daniel Rubinfeld observed in their book “Microeconomics” that "the demand for a good
depends on its price, as well as on consumer income and on the prices of other goods. Similarly, supply
depends on price, as well as on variables that affect production cost…. Often, however, we want to
know how much supply or demand will rise or fall." This measurement of a product or service's
responsiveness to market changes is known as elasticity. Todd G. Buchholz, writing in his book “From
Here to Economy”: “A Shortcut to Economic Literacy, used an example from the world of sports
business to provide an example of economic elasticity: "Will football fans buy the same number of
tickets if the team jacks up the prices? If they do, then demand is inelastic. If higher prices lead the
fans to cut back their attendance, then demand is elastic, or sensitive to change."
There are three main factors that influence elasticity of supply and demand .
1.The availability of substitutes. This is probably the most important factor influencing the
elasticity of a good or service. In general, the more substitutes, the more elastic the demand will be. For
example, if the price of a cup of coffee went up by $0.25, consumers could replace their morning
caffeine with a cup of tea. This means that coffee is an elastic good because a rise in price will cause a
large decrease in demand as consumers start buying more tea instead of coffee.
However, if the price of caffeine were to go up as a whole, we would probably see little change
in the consumption of coffee or tea because there are few substitutes for caffeine. Most people are not
willing to give up their morning cup of caffeine no matter what the price. We would say, therefore, that
caffeine is an inelastic product because of its lack of substitutes. Thus, while a product within an
industry is elastic due to the availability of substitutes, the industry itself tends to be inelastic. Usually,
unique goods such as diamonds are inelastic because they have few if any substitutes.
2.Amount of income available to spend on the good. This factor affecting demand elasticity
refers to the total a person can spend on a particular good or service. Thus, if the price of a can of Coke
goes up from $0.50 to $1 and income stays the same, the income that is available to spend on coke,
which is $2, is now enough for only two rather than four cans of Coke. In other words, the consumer is
forced to reduce his or her demand of Coke. Thus if there is an increase in price and no change in the
amount of income available to spend on the good, there will be an elastic reaction in demand; demand
will be sensitive to a change in price if there is no change in income.
3.Time. The third influential factor is time. If the price of cigarettes goes up $2 per pack, a
smoker with very few available substitutes will most likely continue buying his or her daily cigarettes.
This means that tobacco is inelastic because the change in price will not have a significant influence on
the quantity demanded. However, if that smoker finds that he or she cannot afford to spend the extra $2
per day and begins to kick the habit over a period of time, the price elasticity of cigarettes for that
consumer becomes elastic in the long run.
To determine the elasticity of the supply or demand curves, we can use this simple equation:
Elasticity = (% change in quantity / % change in price).
 It is a measure of relative changes. If elasticity is greater than or equal to one, the curve is
considered to be elastic. If it is less than one, the curve is said to be inelastic.
Elasticity varies among products because some products may be more essential to the
consumer. Products that are necessities are more insensitive to price changes because consumers would
continue buying these products despite price increases. Conversely, a price increase of a good or
service that is considered less of a necessity will deter more consumers because the opportunity cost of
buying the product will become too high.
A good or service is considered to be highly elastic if a slight change in price leads to a sharp
change in the quantity demanded or supplied. Usually these kinds of products are readily available in
the market and a person may not necessarily need them in his or her daily life. On the other hand, an
inelastic good or service is one in which changes in price witness only modest changes in the quantity
demanded or supplied, if any at all. These goods tend to be things that are more of a necessity to the
consumer in his or her daily life.

Language notes:
* The phrase "supply and demand" was first used by James Denham-Steuart in his Inquiry into the
Principles of Political Economy, published in 1767. Adam Smith used the phrase in his 1776 book
“The Wealth of Nations”, and David Ricardo titled one chapter of his 1817 work “Principles of
Political Economy and Taxation” as "On the Influence of Demand and Supply on Price";

Weigh heavily – мати велике значення;

the best combination of goods possible – найкращий вибір товарів;
the higher …, the lower …– чим вищий,… тим нижчий;
an upward slope – крива, спрямована вгору.

VOCABULARY FOCUS

Ex.1. Find the English equivalents in the text.

Споживати товари та послуги; традиційна економіка; за умови конкуренції; ринок визначає ціну
продукту; насправді куплений чи проданий; не досить лише просто хотіти чи бажати предмет;
домашнє господарство; преференції споживача; пересічний громадянин; мати значний вплив
на ринок; суть ринкової економіки; справжній попит; відображення попиту та пропозиції;
розподіл ресурсів; альтернативні витрати; бути проданим за певною ціною; ринкова рівновага;
наявність замінників; предмет необхідності для споживачів.

Ex.2. Give Ukrainian equivalents for the following phrases.

To have the power to influence or set price; the operation of supply and demand; the amount of goods
and services; to show the ability to pay; consumer preferences; to weigh heavily; to maximize utility; to
 end up with the best combination; at the other side of; the smallest unit of supply; to make selling
decisions; the amount available for sale; the amount purchasers are willing to buy; one of the most
fundamental concepts; to be a reflection of; in the most efficient way possible; to show an upward
slope; two opposing forces shape the market; fluid equilibrium in a standard market; to be at
equilibrium; the percentage change; to vary among products; to be elastic due to availability of
substitutes.

Ex.3. Give three forms of the following verbs. Find the sentences with these verbs in the text.
Have, let, mean, buy, pay, show, sell, know, underlie, go, forgo, meet, give, get, understand, become.
Ex.4. Make up noun+noun or adjective+noun collocations (there may be several variants).You
can add other word collocations. Give examples either from the text or of your own.
Economic, conventional, decision-making, consumer, demand, market, supply, opportunity, upward,
percentage, quantity
Choices, preference, economics, unit, economy, cost, slope, change, relationship, units, demanded.
Model: economic choices
e.g. All societies necessarily make economic choices.
Ex.5. Match up the terms on the left with the definitions on the right.
1. demand a is the relationship between price and
quantity demanded
2. supply b states that the higher the price, the
higher the quantity supplied
3. demand relationship c is the amount available for sale or
the amount that sellers are willing to
sell at a specified price
4. supply relationship d is the correlation between price and
how much of a good or service is
supplied to the market
5. utility e is response of supply and demand to
various factors
6. the Law of Demand f is one in which changes in price
witness only modest changes in the
quantity demanded or supplied
7. the Law of Supply g is some sort of compromise on the
price and quantity of goods sold: the
market price is the price at which
buyers are willing to buy the same
number of goods that sellers are
willing to sell
 8. elasticity h is when all buyers will try to make
themselves as happy as possible, by
spending what money they have in
the best way possible
9. inelastic good or service i refers to the buying behaviour of a
household
10. market equilibrium j states that, if all other factors remain
equal, the higher the price of a good,
the less people will demand that
good

Ex.6. Choose an appropriate phrase to complete the following sentences.

The buying behaviour, by way of, which is analogous, the price of a product, would continue buying,
weigh heavily, the opportunity cost, to maximize their utility, the amount of a product, in a standard
market.

1. For conventional economics, the market answers these questions _____________ the operation of
supply and demand.
2. The market determines _____________ , and the price determines what is produced, and who can
afford to consume it.
3. In microeconomics, demand refers to _____________ of a household.
4. Consumer preferences _____________ in a household's buying decisions.
5. All buyers will try _____________ , that is, make themselves as happy as possible, by spending what
money they have in the best way possible.
6. The quantity demanded is ________ people are willing to buy at a certain price.
7. In microeconomics, the smallest unit of supply is the firm, _____________ to the demand unit of the
household.
8. Because supply and demand can shift and change, equilibrium _____________ is also fluid,
responding to changes in either market force.
9. Products that are necessities are more insensitive to price changes because consumers
_____________ these products despite price increases.
10. A price increase of a good or service that is considered less of a necessity will deter more consumers
because _____________ of buying the product will become too high.

Ex.7. Complete the following sentences with prepositions or adverbs.

1. ___ conditions ___ competition, the market determines the price ___ a product.
2. ___ microeconomics, demand refers ___ the buying behavior ___ a household.
3. Each household, or small-scale decision-making unit, is affected ____ different factors when making
choices ____ what to buy and how much to buy.
4. ____ the other side ____ every transaction is a seller.
5. ____ considering both their preferences and their budget, the buyers ensure that they end up ____ the
best combination ____ goods possible.
6. Because the household is such a small unit, no household has a significant impact ____ the market,
and so the actions ____ any single household is its best effort to react ____ the market price and the
goods available.
7. The correlation ____ price and how much ____ a good or service is supplied ____ the market is
known as the supply relationship.
8. ____ other words, the higher the price, the lower the quantity demanded.
9. Buyers want to buy ____ many goods ____ possible, ___ cheaply ___ possible.
10. When supply and demand are equal, the economy is said to be ___ equilibrium.

Ex.8. Choose and combine two parts logically to make complete sentences.
1. Under conditions of a is known as the supply relationship.
competition, where no
one has the power to
influence or set price,
2. If all three conditions b no household has a significant impact on the market.
are not met
3. Because the household c some products may be more essential to the consumer.
is such a small unit
4. Economists refer to the d then the demand is not real.
behavior of sellers
5. The correlation e if a slight change in price leads to a sharp change in the
between price and how quantity demanded or supplied.
much of a good or
service is supplied to
the market
6. Producers supply more f because they have few if any substitutes.
at a higher price
7. A good or service is g in which changes in price witness only modest changes
considered to be highly in the quantity demanded or supplied.
elastic

8. Elasticity varies among h as the market force of supply.

products because
 9. An inelastic good or i the market (everyone, producers and consumers
service is one together) determines the price of a product.
10. Unique goods such as j because selling a higher quantity at a higher price
diamonds are inelastic increases revenue.

Ex.9. Read the text and choose the best option.

The supply/demand theory (1) ________ the paradox of inessential-but-expensive diamonds and
cheap-but-essential water. The supply-and-demand theory tells us that diamonds are highly priced
because they are (2) ________. There are objectively (3) ________of them relative to demand. If
diamonds were as (4) _______ as gravel we would use them to pave our garden walks. More precisely,
the (5) ________ point in the market for diamonds is reached at a high price per ounce. Recall that at
the equilibrium point the supply and demand curves the paradox the quantity demanded (6) ________
the quantity supplied. Diamonds become more (7) ________ to produce as more are produced.
Consequently, the supply curve slopes up: producers want a higher price (to cover their (8) ________
cost) if they have to produce more. The price is in equilibrium determined at the (9) ________ of
supply and demand. Given the unique supply/demand circumstances in this market (people badly want
diamonds and diamonds are costly to produce) the intersection (10) ________ at a high price. If the
demand curve were to fall back towards the origin, the price would fall.

1. a) solves b) decides c) manages d) proves

2. a) deficit b) scarce c) rare d) seldom
3. a) little b) few c) many d) much
4. a) common b) typical c) useful d) particular
5. a) equality b) proper c) equilibrium d) necessary
6. a) equals b) is c) will be d) becomes
7. a) expensive b) precious c) valuable d) costly
8. a) raising b) increasing c) rising d) improving
9. a) intersection b) point c) place d) interaction
10. a) happens b) becomes c) is d) occurs

Ex.10. Look through the text again and replace the words /phrases in italics with similar ones.
1. Society needs to make choice what should be produced, how it will be produced, and who is allowed
to buy those products.
2. The market answers these questions by means of supply and demand.
3. In microeconomics, demand refers to the way in which groups of people living together buy goods.
4. Each household or a small organization is influenced by different factors.
5. Consumer preferences influence a household’s buying decision to a great extent.
6. All buyers want to make the best use of the usefulness of a product.
7. Supply and demand is the chief support of the system of market economy.
8. The relationship between demand and supply is the basis of the forces behind the allocation of
resources.
9. People naturally avoid buying a product that will refrain them from buying something else they value
more.
10. Two opposing forces of demand and supply form the market.

Ex.11. Translate into English:

1. Суспільству слід робити вибір щодо того, що виробляти, як слід виробляти товари та послуги,
та хто може споживати ці товари та послуги.
2. Преференції споживача дуже впливають на купівельне рішення сім’ї.
3. Попит та пропозиція завжди рівносильні, оскільки кількість куплених товарів дорівнює
кількості проданих товарів.
4. Фірми працюють незалежно одна від одної, вирішуючи, що продавати та скільки продавати,
залежно від ціни.
5. Саме сукупні сили попиту та пропозиції створюють ринкову економіку.
6. Попит та пропозиція є, можливо, однією з найголовніших концепцій економіки та основою
ринкової економіки.
7. Ціна є відображенням попиту та пропозиції.
8. Кажуть,що ринкова рівновага настає, коли попит та пропозиція є рівними.
9. Продукти першої необхідності менш вразливі до ціни, тому що споживачі будуть
продовжувати купувати їх незважаючи на зростання ціни.
10. Еластичність відрізняється серед різних продуктів, оскільки деякі продукти можуть бути більш
важливими для споживача.

LANGUAGE SKILLS

Ex.12. Ask questions to which the following statements may be answers.

1. The market (everyone, producers and consumers together) determines the price of a product.
2. Demand is comprised of three things: desire, ability to pay and willingness to pay.
3. Another factor that affects such decisions is income.
4. Economists refer to the behaviour of sellers as the market force of supply.
5. Demand refers to how much (quantity) of a product or service is desired by buyers.
6. In market economy theories, demand and supply theory will allocate resources in the most efficient
way possible.
7. Because supply and demand can shift and change, equilibrium in a standard market is also fluid.
8. Producers supply more at a higher price because selling a higher quantity at a higher price increases
revenue.
9. When supply and demand are equal, the economy is said to be at equilibrium.
10. A good or service is considered to be highly elastic if a slight change in price leads to a sharp change
in the quantity demanded or supplied.

Ex.13. Answer the questions:

1. What kind of choices does every society need to make?
2. What defines the price of a product under condition of competition?
3. Prove that the terms demand and supply not always mean the amount of goods actually sold or
bought.
4. What do micro economists usually try to explain?
5. What is demand comprised of?
6. When is demand real?
7. Explain the term utility.
8. What is demand?
9. What is supply?
10. What does the Law of Demand state?
11. What does the Law of Supply state ?
12. How do supply and demand shape the market?
13. When is the economy said to be at equilibrium?
14. Does equilibrium exist in the real market place?
15. What concept helps to understand supply and demand theory?

Ex.14. Make a presentation of the topic.

WRITING

Ex.15. Make up a plan for a summary of text A.

Ex.16. Using your plan as a base write a brief summary (25-30 sentences) of the text.

Ex.17. Using the information from the text, write an essay on one of the following topics:
a) An increase in demand raises the price of a particular good. An increase in price cuts demand for that
good.
b) How does a rational consumer allocate a fixed income between the purchase of two commodities?
Would the consumer always use an increase in income to buy more of both goods?

DISCUSSION POINTS
 Ex.18. With your group mates do the following.
1. Analyze the effect, in the short run only, on the price of coffee of (i) a severe frost; (ii) a fall in the
rate of VAT; (iii) the introduction of rationing.
 You are not expected to have a detailed knowledge of the coffee industry.
 Apply your understanding of general supply and demand analysis.
 Make assumptions about the price elasticity of supply and demand for coffee and then draw flat or
steep curves to match.
2. Explain why the prices of some commodities fluctuate more than those of others.
 Explain why unstable conditions of supply and demand result in price changes.
 Explain why price inelasticity amplifies the effect on price of changes in supply and demand.
 Make use of graphs and relevant examples.

Ex.19. Explain the following sayings in your own words. What other sayings on the topic do you
know?
1. Supply always comes on the heels of demand. Robert Collier, American motivational author,
(1885-1950)
2. As scarce as truth is, the supply has always been in excess of the demand. Josh Billings, American
humorist (Henry Wheeler Shaw) (1818 – 1885).
3. As the economy grows, so will the demand for energy. Cliff Stearns, the U.S. Representative for
Florida's 6th congressional district, (1941)
4. A variety of factors contribute to the price of gasoline in the United States. These factors include
worldwide supply, demand and competition for crude oil, taxes, regional differences in access to
gasoline supplies and environmental regulations. Gary Miller, the U.S. Representative for California's
42nd congressional district, (1948)
5. It's the law of supply and demand. Demand is down, supply is up, so the price is down. Andrew
Harrington, Economist, Australia & New Zealand Banking Group Ltd

TEXT B. THE ROLE OF PRICES

Ex.20. Scan the text below. What main factors does it mention to support the keynote, i.e. the role
of prices?
 Prices are key ingredients in our economy because they make things happen. If buyers want to
own some items badly enough, they will pay more for them. (0) ________ Prices play such an
important role in economic life that the United States is often described as a price-directed market
economy. Let us see why.
1. Act as Signals to Buyers and Sellers. One of the things that prices do is carry information to
buyers and sellers. (1) ________When prices are high enough, they send a "sell" signal to sellers
(retailers), who can now earn a profit at the new price.
2. Encourage Efficient Production. Prices encourage business people to produce their goods at
the lowest possible cost. (2) ________
Firms that are efficient will produce more goods with fewer raw materials than firms that are
inefficient. (3) ________ While these efforts are in the best interests of the sellers, all of us may benefit
because we are provided with the things we want at lower costs.
3. Determine Who Will Receive the Things Produced. Finally, prices help to determine who
will receive the economy's output of goods and services. The price that a worker receives for doing a
job is called a wage. (4) ________What the worker can buy with those wages will depend, in turn,
upon the prices of the goods and services the worker would like to own.
Let’s look at some examples. The most obvious cost a person bears in buying a product is the
price of the product. Price reflects cost because people have a limited amount of funds that they can
spend, and if they spend their money on one thing, they cannot spend it on another. (5) ________As a
result, we expect people to buy more hamburger if the price is $1.00 per pound than if it is $2.00 per
pound.
The amount of income a person receives affects the cost of buying an item because it
determines which options a person must give up when buying a product. If a person with a low income
spends $5000 for a trip around the world, he will have to cut back on food, clothing, or shelter. (6)
________
Increases in people's incomes raise consumption of most products. These products are called
normal goods. There are some products, however, that people use less of as their income increases;
these products are called inferior goods. Public transportation is an example - as people's incomes rise,
 they stop riding the bus and drive their own cars. (7) ________ It was because they were a symbol of
"working-class" clothes that they were adopted by the radical left in the 1960s, and from there they
moved into high fashion.
Prices of related goods also influence how much of a product people buy. Goods that are
substitutes satisfy the same set of goals or preferences. An example of a substitute for hamburger is
pork. (8) ________ The opposite of a substitute is a complement, a good that helps complete another
in some way. Catsup and hamburger buns are complements to hamburger, and if they are priced low
enough, consumption of hamburger may rise. Sometimes goods are such good complements that they
are sold together and we think of them as a single item. (9) ________
There are other factors that influence the amount of a particular product that people are willing
to buy, such as the number of consumers in the market and their expectations about future prices,
incomes, and quality changes. To get a complete list for any product might be time consuming and
difficult, but it is not necessary because we want to focus on the relationship between price and the
quantity of a product that people are willing to buy during some interval of time. (10) ________

Ex.21. Read the text. Choose the best sentence A-J to fill each of the gaps 1-10. Do not use any
letter more than once. There is an example at the beginning.
0.When sellers want to sell some items badly enough, they will lower their prices.

A When prices are low enough, they send a "buy" signal to buyers (consumers), who can now afford
the things they want.
B If pork prices are high, people are tempted to shift away from pork to hamburger, and if pork prices
are low, people are tempted to shift from hamburger to pork.
C Producers strive for efficiency as a way of increasing their profits.
D The same trip will cause a person with a high income to cut back on a very different set of options.
E Left shoes and right shoes are an example.
F Blue jeans were once another example-people with higher incomes bought them less frequently than
people with lower incomes.
G To do this, we will assume that all other factors are held constant.
H The amount of this wage determines how much the worker has to spend.
I The lessit costs to produce an item, the more likely it is that its producers will earn a profit.
J When the price of a product goes up, the amount of other things that a person must give up in order
to buy the product rises.

Ex.22. Read the text and decide whether the following statements are true (T) or false (F).
Correct the false statements.
1. Prices are not very important in our economy.
2. Sellers always lower prices for the goods they sell.
3. Prices carry information to buyers and sellers.
4. When prices are low, buyers will buy less.
5. Sellers can earn profit when prices are high enough.
6. Prices encourage business people to produce less if the prices are low.
7. Efficient firms will produce less with fewer raw materials.
8. All of us will benefit if producers increase their profits through efficiency.
9. Prices tell who receives the economy’s output.
10. What the worker can buy will depend upon the economic situation in the country.
11. The amount of income a person receives doesn’t affect the cost of buying.
12. Increases in people's incomes raise consumption of most products.
13. Prices of related goods also influence how much of a product people buy.
14. Jeans were a symbol of "upper-class" clothes.
15. The number of consumers in the market and their expectations about future prices, incomes, and
quality changes are other factors that influence the amount of a particular product that people are
willing to buy.

Ex.23. Read the text again and answer the following questions.
1. Why is the US described as a price-directed economy?
2. What happens when prices go up?
3. How can people get benefit from efficient work of some firms?
4. How can the prices determine who will receive the things produced?
5. What is the most obvious cost a person bears ?
6. Why does price reflect cost? Give an example.
7. In what way does the amount of income a person receives affect the cost of buying an item?
8. What are the normal goods and inferior goods? Give examples.
9. What is the difference between substitutes and complements?
10. What are some other factors that influence the amount of a particular product that people are willing
to buy?

TEXT C: TWO FACTORS THAT AFFECT LABOUR SUPPLY AND DEMAND

Before reading
If the price/cost factor is the main to affect
supply and demand of commodity goods, how
does it refer to the labour market? Can you think
of any other factor?

Reading
Read an article from the website ehow.com and do the tasks following the text.

Know the factors that affect your labour supply and demand so your business can remain
competitive.
(1) In every business that deals with a collection of employees, labour supply and demand must
be a consideration by management or ownership. No business that requires additional employees can
reach their potential without them; striking a balance between the labour available and the labour
needed is always a concern that relates to productivity and to profits. Understanding the main factors
that can sway labour supply and demand can help you to run a successful business.
(2) Before learning the factors that affect labour demand, you must first know exactly what is
meant by the term. Simply put, labour demand is the amount of workers needed to get the job done.
Labour demand is a decision by management or ownership concerning how many employees or labour
hours to use to complete a necessary task. Usually, the decision is heavily influenced by money. It is in
the company's best interests to use as little labour as necessary to save money while still accomplishing
the workload that is required.
(3) On the opposite side of this carefully balanced scale is labour supply. Labour supply is
simply the amount of workers available to a business at a given time. During times when labour supply
is low, it can be tougher to retain employees because of other opportunities and fewer out-of-work
people.
(4) The wage factor is the most significant issue affecting labour supply and demand. People
do not typically work for fun. They work for money and the amount they get paid is a central factor in
deciding whether they will take a job or stay at a job when something else is available. Higher wages
increase the labour supply for a company because it makes the job more attractive to more people.
Lower wages, however, may increase the labour demand because companies can afford to hire more
people at a lower rate than at a higher rate. This results in a constant tug of war in the delicate balance
between supply and demand.
(5) Barriers to entry are a second factor that affects labour supply and demand. Demand from
hiring companies may go up because the employees they seek are specialized in some particular skill or
have many requirements of new hires. Meanwhile, the labour supply decreases significantly because of
these barriers. If a company only considers master's degree holders for a position, the supply of
candidates for the job drops significantly compared to a company seeking candidates with a bachelor's
degree. In addition, companies that require complicated testing or that require new hires to "jump
through hoops" to get through the interview process usually find that their labour supply drops off
significantly because of other options in the market that are easier to nail down.

Task 1. Explain in your own words what labour demand and labour supply mean.
Task 2. Paraphrase the following sentence: Striking a balance between the labour available and the
labour needed is always a concern that relates to productivity and to profits. (para.1)
 Task 3. Why is it more difficult to retain employees when labour supply is low? (para.3)
Task 4. Explain what consequences do changes in wages have? (para.4)
Task 5. Expression “jump through hoops” means
a) to do smth too soon, before the right time;
b) to do smth difficult in order to achieve smth;
c) to enthusiastically accept an opportunity or offer. (para.5)

BUSINESS COMMUNICATION

MAKING AN APPOINTMENT

1. Are you busy this week?

2. What are you doing tonight?
3. Where are you having lunch tomorrow?
4. What plans do you have for the next seven days?
5. What is your next appointment?

Ex.1. Read the definitions from Longman Dictionary of Contemporary English.

ap‧point‧ment
1 [countable] an arrangement for a meeting at an agreed time and place, for a particular purpose
You can say: have an appointment, make an appointment, an appointment to do something, book an
appointment (BrE), schedule an appointment (AmE), cancel an appointment, miss an appointment,
doctor’s/dentist’s/dental appointment.
She has an appointment with a client at 10.30.
You should phone his secretary if you want to make an appointment.
I have an appointment to see the doctor.
Please give us two days’ notice if you have to cancel an appointment.
I was already forty-five minutes late for my dental appointment.
keep an appointment (go to an appointment you have arranged): For the third time in a row, she had
failed to keep her appointment .
by appointment only (only if you make an appointment in advance): All consultations are by
appointment only.

Ex.2. Replace the underlined expressions with appropriate forms of the verbs from Ex.1 above.
1. An appointment with John Smith was organized for 1 February.
2. But not everyone could go to it.
3. Even John Smith could not attend it.
4. So it was decided not to have the appointment at all.
5. It was arranged for 1 March.
6. She arranged an appointment for her son to see the doctor.

7. I've got a dental appointment at 3 o'clock.

8. He failed to go to the appointment he had arranged.

9. Visiting the castle is only at the time that has been arranged in advance.
10. You should phone his secretary if you want to put an appointment in your diary.

Ex.3. Questions for discussion.

1. What are typical problems of business appointments?
2. How can you explain the aim of business appointments?
3. Have you ever forgotten an appointment?
4. How do you remember your appointments?
5. Making an appointment can be complicated if two people are very busy. How do you find time that
is convenient for both of you?
6. Imagine you are making a telephone call. This time you are arranging an appointment to see
someone. What phrases might you use or hear?

Ex.4. Read a sample telephone conversation.

Michelle: Mr Hibberd’s office.
Peter: Hello, can I speak to Brian Hibberd, please?
Michelle: I’m afraid he’s in a meeting until lunchtime. Can I take a message?
Peter: Well, I’d like to arrange an appointment to see him, please. It’s Peter Jefferson here.
Michelle: Could you hold on for a minute, Mr Jefferson. I’ll just look in the diary. So when’s it
convenient for you?
Peter: Some time next week if possible. I know he’s away the following week.
Michelle: Yes, that’s right, he’s on holiday for a fortnight.

Peter: Well, I need to see him before he goes away. So would next Wednesday be okay?
Michelle: Wednesday. Let me see. He's out of the office all morning. But he's free in the afternoon, after
about three.
Peter: Three o'clock is going to be a little difficult. But I could make it after four.
Michelle: So shall we say 4.15 next Wednesday, in Mr Hibberd's office?
Peter: Yes, that sounds fine. Thanks very much.
Michelle: Okay, then. Bye.

Ex.5. Read and study useful phrases.

- I’d like to make an appointment with you.
 - Could we meet to discuss...
- What day will be convenient for you?
- What time would be convenient?
- How about...?
- I’ll look forward to seeing you.
Asking to meet
- Are you available on the 17th?
- Can we meet on the 16th?
- How does the 3rd sound to you?
- Are you free next week?
- Would Friday suit you?
- Is next Tuesday convenient for you?
- What about some time next week?

Responding to an appointment:

Agreeing on a date
- Yes, Thursday is fine.
- Thursday suits me.
- Thursday would be perfect.
- Yes, Monday would be fine.
Suggesting a different date
- I'm afraid I can't on the 3rd. What about the 6th?
- I'm sorry, I won't be able to make it on Monday. Could we meet on Tuesday instead?
- Ah, Wednesday is going to be a little difficult. I'd much prefer Friday, if that's all right with you.
- I really don't think I can make it on the 17th. Can we meet up on the 19th?
Setting a time
- Is 3pm a good time for you?
- If possible, I'd like to meet in the morning.
- How does 2 pm sound to you?
Changing the arrangement
- We were going to meet next Friday but something urgent has come up. I'm very sorry.
- I'm afraid that I'm not going to be able to meet you after all. Can we fix another time?
- Something has just come up and I won't be able to meet you this afternoon. Can we make another
time?
- Unfortunately, due to some unforeseen business, I will be unable to keep our appointment for
tomorrow afternoon. Would it be possible to arrange another time later in the week?
- I’m afraid that I have to cancel our meeting on Wednesday, as something unexpected has come
up.
 - I'm afraid that I'm not going to be able to meet you after all. Can we fix another time?

Ex.6. Read and translate the dialogue.

Ann: Hello.
Serge: Hi, Ann. It’s Serge. I’m calling to make an appointment for Lee Ann. She wants to meet Miles
next week sometime.
Ann: Let me take a look at his appointment schedule. Let’s see, can Lee Ann be here on Tuesday at 2
pm?
Serge: No, she’s tied up all Tuesday afternoon, but I could shuffle around some of her commitments to
free her up on Tuesday morning, if that helps.
Ann: Unfortunately, Tuesday morning is out. I could bump someone on Wednesday afternoon at 3 pm.
Can Lee Ann be here at that time?
Serge: She has an appointment at 2:30 in this office, but it shouldn’t last more than a half hour. She
should be able to make it by 3 o’clock if she’s not running late. Better yet, I may be able to
change something, maybe push back that appointment until she gets back to the office. Why
don’t you pencil her in for now?
Ann: Okay, I’ll do that, but can you confirm with me by Monday?
Serge: Sure, I’ll give you a heads up no later than noon on Monday if I can’t push back her other
appointment.
Ann: Okay, sounds good. Tell me, do you ever feel like we’re spinning our wheels, spending our days
making, changing, and canceling appointments?
Serge: Yeah, every single day!

Ex. 7. Role-play the dialogue.

Rachel: Hello, my name is Rachel Jones and I'd like to make an appointment to speak to Mr. Smith.
Secretary: Can I ask you what is the purpose of the appointment?
Rachel: Of course. I met him at a luncheon last week and he asked me to call him to make an appointment
to talk about a job.
Secretary: Okay. Mr. Smith has an appointment available on Monday June 10th at 4 pm or Thursday June
13th at 2 pm. Which one would be better for you?
Rachel: Monday at 4pm would be perfect.
Secretary: Excellent. I've got you down for that day and time. Can I have your phone number just in case
something comes up and he needs to reschedule?
Rachel: Yes, certainly. It is 085-897-9393.
Secretary: (repeats the phone number to make sure it's correct) 085-897-9393.
Rachel: That's it. Thank you so much. I'll see you on Monday June 10th at 4 pm.
Secretary: Have a nice day!
Ex.8. Complete the dialogue with the words and word combinations from the box.
A)
are you free, fine, I'll see you, I'm calling about, speaking, visiting

Pam: Hello. Pam Robertson __________ .

Bob: Oh hello, Pam. It's Bob here.
Pam: Hello Bob. How can I help you?
Bob: _______ the new advertising budget meeting. ______ on Tuesday afternoon?
Pam: Let me see. Sorry I'm __________ the new factory all day on Tuesday. How about Wednesday at
two p.m.?
Bob: I'm meeting a customer in the morning, but the afternoon is __________ .
Pam: Good. So __________ on Wednesday then. Good bye.
Bob: Good bye.

B)
call me, can I help you, cannot leave, could you come, how about a little later, I’d like to make
an appointment, is that OK with you, may not be able to arrive, will be seen, work

A: Good morning. Dr. Brown's office. __________?

A: Good morning. I __________with Dr. Brown.
B: Ok. Just a minute. __________on Monday at 1:00 pm?
A: No. Monday is a busy day for me. I __________until 9:00 pm. I __________the office early.
B: What about Wednesday at 6:00 pm? __________?
A: __________? You know how heavy the traffic is at 6. I __________on time.
B: OK. You __________by Dr. Brown on Wednesday at 7. OK? If you can't come for any reason, please
__________and I will try to set another time.
B: OK. Thanks.

Ex.9. Work with a partner.

Your partner wants to arrange a meeting next week. However, you're very busy!
Think of three reasons why you are busy.
1)
2)
3)
Role-play the conversations with your partner:
1. Your partner will suggest a time. Say you are busy, and use one of the above reasons.
2. Your partner will then suggest a different time. Accept the second time.
Ex.10. Work in pairs. Practice making and changing an appointment. You are going to role-play
five situations. Refer to Ex. 5 for useful phrases.
1. A. You're a chemical engineer who works in the company's R&D labs. You're attending a
conference on a new chemical processing technology. A friend from college (who is now a professor
doing research in the same area) will be attending the conference. You want to schedule some time to talk
to him and get his perspective on recent developments in the field. But he is hard to reach.
B. An old friend from college (who is doing research work in the same field as you in the
R&D labs of a large corporation) wants to get together and talk. You try to find some time for him in your
busy schedule.
2. A. You sell expensive medical equipment. You have to make an appointment to talk with a
doctor who is very influential at a hospital where you're trying to close a sale. You want to get him in the
right mood so you invite him to play a round of golf at an expensive country club.
B. You're a doctor at an important university hospital. A salesman selling cancer treatment
equipment has been hounding you trying to get some time to talk with you. Now he wants to meet over
golf which doesn't seem too bad to you. You try to find some time for him in your busy schedule.
3. A. You own 20% of a company and feel that your ideas about where the company should be
heading aren't being taken into account by the company's management. You schedule a meeting with the
CEO to talk about this.
B. You are the CEO of a company. A major stockholder in the company has called you up
repeatedly trying to get some time to talk to you about his vision of the future for the company. His ideas
aren't really compatible with yours but you think it judicious to hear him out. You schedule some time for
him over lunch.
4. A. Your friend has a job providing tech support to sales reps at a promising software startup.
You've heard that there's an opening and you want to talk to your friend about the possibility of you
landing the job. You suggest lunch or beer after work.
B. One of your best friends has just arrived back from his adventures in Asia. He's trying to
find a job again and thinks you can help him to talk to your boss into giving him a job in customer
support. You both decide to meet over lunch.
5. A. You're an investment banker visiting Jakarta to set up some merger and acquisition deals. A
reporter wants to interview you.
B. You're a reporter who wants to write an insider story on the corporate reorganizations that
are taking place in the wake of the Asian financial crisis. You make an appointment to talk with an
investment banker (a friend of a friend) to talk about what's going on.

Ex.11. Imagine and name a company you’d like to work for.

Design your own “business card”.
Fill the blank weekly planner with as many appointments as possible.
Play a role of a business person arranging meetings during work hours.
Agree on when to meet, where to meet, and what to discuss.
You cannot meet the same person twice.
Possible reasons why two people might have a business meeting: buying or selling, cooperating, asking
advice, discussing a legal issue, etc.
9am 2pm 6pm
M
T
W
T
F
S
S

Ex.12. Arrange personal meetings with your friends, outside work hours.
You might meet, for example to eat a meal, climb a hill, watch TV, go dancing, go shopping, play sport,
etc.
You cannot meet the same person twice.
Sentences appropriate to use with friends:
Do you want to meet some time?
When are you free?
OK, see you then!

GRAMMAR
PAST PERFECT

Ex.1. Read the sentences and define the tense forms. Translate the sentences into Ukrainian.
1. They had completed all the preparations for the fancy-dress ball by 5 o’clock.
2. The man thanked the doctor who had cured him of his disease.
3. Hardly had he touched the pillow when he fell asleep.
4. He made great progress last year and could read the texts without a dictionary. He had worked
at his language very hard.
5. In the morning, the passengers felt good after the night they had spent on the train.
6. Last night he completed the experiment he had begun some months before.
7. No sooner had she opened the drawer than she found the copy of the document.
8. They had been partners for some 10 years before I met them.

Ex.2. Complete the sentences in the Past Perfect.

1.Without any reason, the customer returned the goods that we ________(deliver) .
2.Before Ellen could say anything, Cindy _______(hang up) the phone.
3.When William was employed, I ______(work / already) here for three years.
4.I______ (start / just) to type the letter, when the phone rang.
5.When I sent the mail, I realized that I ______(forget) to attach the file.
6.Sue and Tom are best friends, though before the meeting last month they _______(know / not even)
each other.
7.Catherine _______(meet / not) Phil Brown before the trade fair in May.
8.We spoke about the conference that _______(take place) the week before.
9.After the meeting I thanked Misses Last, who _______ (manage) everything.
10._______(you / gain) experience in that field before you started to work for us?

Ex. 3. Write the verbs in the Past Perfect. Use the negative form.
1. In the shopping centre, I met a friend who I (see / not) for ages.
2. The burglar could walk right into the house because you (lock / not) the door.
3. We lost the match because we (practice / not) the days before.
4. The secretary quickly copied the papers that she (read / not) .
5. We ate at a restaurant last night because I (buy / not) anything for dinner.
6. When we came back, it was cold in the house because Alice (close / not) the windows.
7. Margaret was angry with me all day long just because I (greet / not) him first.
8. When I met Jane at eleven o’clock, she (have / not) breakfast yet.
9. I couldn’t go to the cinema with my friends last night because I (finish / not) my homework yet.
10. Fred answered my question although I (ask / not) him.

Ex. 4. In pairs ask and answer questions in the Past Perfect.

1.(what / Bob / do) that he was kept in after his lectures? - What had Bob done that he was kept in after
his lectures?- He had missed more than 10 seminars.
2.(you / eat) anything before you went to the theatre? - Had you eaten before you went to the theatre?-
Yes, I had. No, I hadn’t.
3.(he / live) in London before he moved to Glasgow?
4.(she / find) a new job by that time?
5.(they / book) a room before they went to Dublin?
6.(how often / you / ring) the bell before he answered the door?
7.(why / they / have) dinner before they came to the party?
8.(Carly / wash) the dishes when her Mum came home?
9.(you / read) the contract before you signed it?
10.(who / live) in the house before we moved in?
Ex.5. Work in pairs. Make up short dialogues. Present one event as prior to another event, moment
or situation.
Example: - Fred had cooked dinner by the time his family gathered at home.
- And Fiona?(to polish the floor)
- Fiona had polished the floor by the time her family gathered at home.
- And you?(to bake an onion pie)
- I had baked an onion pie by the time my family gathered at home.
- What had all you done by the time your family gathered at home?
- We had cooked dinner, baked an onion pie and polished the floor by the time our family gathered
at home.
1. The girl had made a new dress for her birthday party. (to buy flowers, to lay the table)
2. She had accompanied the injured girl home before the doctor arrived. (to wash the wound, to bandage
the wound)
3. Patricia had watered the flowers before I went into the yard. (to sweep the yard, to trim the bushes)
4. He had changed the wheel on a car before the trip. (pack the suitcase, book the hotel room)

Ex.6. Match two parts of the sentences in the box using the Past Perfect. Remember what was
first and what was next. Use time expressions when, by the time, after. There may be several
variants.
Model: I had finished my work on the report (first) by the time he returned (next).
FIRST NEXT
1. I/read 10 books a) I /write the course paper
2. He/return b) I/finish my work
3. I/get there c) the concert /begin
4. He/clean the garage d) he/wash the car
5.She/leave for London e) they/think about it
6.The partners/call e) the manager/leave the office
7.The guests/arrive f) we/go to the restaurant
8.The secretary /type the letter g) the mail/arrive
9.The boss/gather the meeting h) we/prepare our report
10.The chairman/open the meeting i) everybody/discuss the matter

Ex.7. Read an extract about Richard Branson’s career and complete the sentences. Use the Past
Perfect.
Sir Richard Branson (born 18 July 1950) is an English business magnate, best known for his Virgin
Group of more than 400 companies.
His first business venture was a magazine called Student at the age of 16. In 1970, he set up an audio-
record mail-order business. In 1972, he opened a chain of record stores, Virgin Records, later known as
 Virgin Megastores. Branson’s Virgin brand grew rapidly during the 1980s, as he set up Virgin Atlantic
Airways and expanded the Virgin Records music label.
Branson is the 4th richest citizen of the United Kingdom, according to the Forbes 2011 list of
billionaires, with an estimated net worth of US $4.2 billion.
1. Before he set up an audio-record mail-order company, he ________ .
2. Before he opened a chain of record stores, he _______.
3. Before his brand Virgin grew up rapidly, _______.
4. Before he set up Virgin Atlantic Airways, _______.

Ex.8. Open the brackets. Pay attention to the use of the Past Simple and the Past Perfect.
1. He already _______(go) by the time I _______(come) to the party.
2. Mother _______(cook) dinner by the time he______ (come).
3. When I _______(arrive) home, I realized that I _______(lose) the key.
4. The shop _______(close) by the time I _______(get ) there.
5. The scientists _______(carry) out many experiments before they ________ (achieve) satisfactory
results.
6. When I _______(arrive), he was staying in the same hotel where we first _______(meet).
7. By the end of the last year he _______ (finish) research.
8. He told me that he _______(not see) much of her since she ______(move ) to another town.
9. When I _______(enter), he already _______(come) and was sitting near the fireplace looking
through a newspaper.
10. She said that they _______(meet) in 1996 for the first time.

Ex.9. Make up sentences according to the pattern.

Hardly had he come when it started raining hard.=He had hardly come when it started raining hard.
No sooner they had received the task than the meeting was over. = They had no sooner received the
task than the meeting was over.
1. She (to open) the drawer, she (to find) the photo which she thought she had lost long ago.
2. He (to touch) the pillow, he (to fall asleep).
3. They (to meet) each other, they (to make) good friends.
4. We (to arrive) at the station, the train (to leave).
5. Sara (to hear) his voice, she (to understand) what had happened.
6. Gemma (to slip) the letter into her pocket, Martini (to enter) the room.
7. Gemma (to read) the letter, she (to understand) she (to lose) Arthur forever.
8. The passenger (to find) the compartment, he (to unpack) his suitcase.
9. The plane (to take off), the steward (to start) safety training.
10. The thief (to steal) the picture, the police (to catch) him.
 Ex.10. Using the words in brackets, complete the text below with the appropriate tenses.
I can't believe I _______ (get) that apartment. I _______ (submit) my application last week, but I
didn't think I had a chance of actually getting it. When I _______ (show) up to take a look around,
there were at least twenty other people who _______ (arrive) before me. Most of them _______ (fill,
already) out their applications and were already leaving. The landlord said I could still apply, so I did.
I _______ (try) to fill out the form, but I couldn't answer half of the questions. They _______ (want)
me to include references, but I didn't want to list my previous landlord because I _______ (have) some
problems with him in the past and I knew he wouldn't recommend me. I _______ (end) up listing my
father as a reference.
It was total luck that he _______ (decide) to give me the apartment. It turns out that the landlord and
my father _______ (go) to high school together. He decided that I could have the apartment before he
_______ (look) at my credit report. I really lucked out!

Ex. 11. Correct the mistakes if there are any.

1. He had hardly come when the lecture had begun.
2. Mummy cooked an exclusive cake before the wedding.
3.Marion had booked a hotel room, bought the tickets and started packing her suitcase.
4. They had make a phone call by the time the manager came.
5. Mr. Johnson retired and went to live in a village.
6. I was very happy as I passed my driving test rather successfully.
7. The Dean finished speaking and had made a few practical suggestions.
8. My group mates have finished the report on the subject when the bell rang.
9. When the director had entered the office, the secretary just finished typing the contract.
10. I asked her twice before she had told me her name.

Ex. 12. Translate into English.

1. Не встиг я вийти з офісу, як пішов дощ.
2. Мері увійшла в кабінет, як раптом згадала, що забула ключі від сейфу вдома.
3. Він хвалився, що зустрічався з цією кінозіркою під час фестивалю.
4. Тед почувався втомленим. Вчора вночі він закінчив писати реферат.
5. До того, як Тео переїхав в будинок в передмісті, він жив в маленькій квартирі в центрі міста.
6. Як тільки ми закінчили переговори, як делегація поїхала в аеропорт.
7. Я знала його. Ми жили в дитинстві на одній вулиці.
8. Гаррі запізнився. Лекція вже почалась.
9. Ми отримали листа від батьків про те, що вони вже переїхали.
10. На жаль, коли ми прибули на станцію, було вже пізно. Потяг вже пішов.
PAST PERFECT CONTINUOUS
Ex.13. Read the sentences and define the tense forms. Translate them into Ukrainian.
1. We had been sleeping for 12 hours when he woke us up.
2. They had been waiting at the station for 90 minutes when the train finally arrived.
3. We had been looking for her ring for two hours and then we found it in the bathroom.
4. I had not been walking for a long time, when it suddenly began to rain.
5. How long had she been learning English before she went to London?
6. Frank Sinatra caught the flu because he had been singing in the rain too long.
7. He had been driving less than an hour when he ran out of petrol.
8. They were very tired in the evening because they had been helping on the farm all day.
9. I had not been working all day; so I wasn't tired and went to the disco at night.
10. They had been cycling all day so their legs were sore in the evening.

Ex. 14. Complete the sentences, putting the verbs in brackets into the Past Perfect Continuous.
1. The room was empty, but the television was still on. Someone_____(watch) it.
2. They _______(wait) long before the taxi arrived.
3. We_______ (try) to open the door for five minutes when Jane found her key.
4. It ________(rain) hard for several hours and the streets were very wet.
5. Her friends had been _____(think) of calling the police when she walked in.
6. They_____ (wait) at the station for 90 minutes when the train finally arrived.
7. Не looked very tired when I came to his place for he______(prepare) for his exams for several
days.
8. They ______________ (shout) for a few hours before their parents arrived.
9. John was in a detention because he_______(misbehave).
10. I had to go on a diet because I ________(eat) too much sugar.
11. Jessica got sunburnt because she had been _____(lie) in the sun too long.
12. The boys ________(quarrel) for half an hour when we arrived home.
13. I ______(date) Angelina for 3 years before we got married.

Ex.15. Ask questions using the questioning words in brackets.

1. They had been working on this project for 5 years before they finished it. (How long?)
2. My Mum had been working for this company for 15 years before she retired. (Who?)
3. I had been thinking of moving since September and then I got a promotion. (Since when?)
4. My friend had been trying hard to improve the situation but eventually she failed. (What?)
5. By seven o'clock last night she had already been typing for ten hours, so I told her to rest for a while.
(By what time?)

Ex.16.In pairs, ask and answer questions.

 1. They had been talking for over an hour before Tony arrived. – Had they been writing the report
before Tony arrived? –No, they hadn’t. They had been talking. How long had they been talking? –
They had been talking for over an hour.
1. She had been working at that company for three years when it went out of business.
2. You had been waiting to get on the bus for 40 minutes.
3. Mike wanted to sit down because he had been standing all day at work.
4. James had been teaching at the university for more than a year before he leftfor Asia.
5. Jason was tired because he had been writing the course paper.
6. Sam gained weight because he had been overeating.
7. Betty failed the final test because she had not been attending classes.
8. He was tired because he had been exercising so hard.

Ex.17. Complete the sentences with the verbs in the box using the Past Perfect Continuous Tense.
consider, drive, quarrel, practice, work, burn, hope, rain, write, try
1.He _______the car for many hours before he came to the crossroads.
2. The pianist _______ the passage hour after hour till he mastered it.
3. When I met her, her eyes were red. She and Mike _______ .
4. When I came, they ______ this question for more than an hour.
5. It was evening and he was tired because he _______ since dawn.
6. He ______ to get her on the phone for 15 minutes before he heard her voice.
7. By 12 o’clock they _______ a composition for hours.
8. The fire _______ for some time before a fire brigade came.
9. I ______ to meet her for ages when I bumped into her by chance.
10. When I left home, it was raining, and as it _______ since morning, the streets were muddy.

Ex.18. Complete the sentences with the Past Perfect Continuous to explain the reason.
Example: Mary got burnt. (Lie in the sun)- Mary got burnt because she had been lying in the sun.
1. Mum looked upset. (Read and cry over a sad story.)
2. Tom ran out of fuel. (Drive for 8 hours.)
3. Bob’s trainers were dirty. (Play football all afternoon.)
4. They looked angry. (Discuss the problem with the board of directors.)
5. Fiona was exhausted. (Pack her suitcase.)
6. Melanie’s eyes were red. (Work at the computer all day long.)
7. She looked stunning. (Go shopping at the weekend.)
8. They were sad to move the house. ( Live at the same place for 20 years.)
9. At last they put up the tent. (Walk in the forest for 3 hours.)
10. Tom and Anna got married. ( Date for three years.)
11. He was happy. He got a position at TNT. (Look for a job as an IT manager.)
Ex.19.Correct the mistakes if there are any.
1. I was tired. I have been writing the composition the whole evening.
2.They were been travelling for a week when they reached the point of destination.
3.We were exhausted. We had been sightseeing in the town all day long.
4. He passed his English exam easily. He had been studying very hard before.
5. Katherine and Josh looked very angry. They had argued since morning..
6. Tracy had been preparing for the presentation until she met a deadline.
7. The kitchen smelled of vanilla. Mum was preparing for the big event for 5 hours.
8. They trained hard for the whole year. It was their big success.
9. Dave was happy. He and Maria had been doing their best until they won the contest.
10.I wasn’t surprised Pete had failed his exam. He wasn’t working hard during the semester.

Ex.20. Translate into English.

1. Вона жила в Києві вже два роки , але так і не знала свій район.
2. Вона сказала, що вона вчила англійську з дитинства.
3. Коли я приїхала у відпустку на море, мої друзі були там уже два тижні.
4. У Люсі очі були червоні. Вона плакала весь ранок.
5. Джесіка та Джері будували будинок вже рік, коли розпочалась економічна криза.
6. Майкл був надто втомлений. Збори тривали з ранку.
7. Наша секретарка друкувала папери вже пів години, коли прийшов шеф і сказав, що вже не
потрібно.
8. Сніг йшов всю ніч. Вранці всі будинки були вкриті снігом.
9. Вона промокла наскрізь. Всю дорогу до станції вона йшла без парасольки.
10.Анастасія була найкраща репортерка. Вона працювала в нашій газеті з самого початку.

Past Continuous or Past Perfect Continuous?

Ex.21. Complete the situations as in the example. Present events as prior to other events or
situations. Use them in a broader context to justify your choice of the verb forms.
Example: Dexter was studying economics when I met him. (for 4 years) – Dexter had been studying
economics for 4 years when I met him. He was glad to work as an accountant.
1. Sophie was working as a lecturer when I joined the staff. (for 10 years)
2. Margaret was wandering from room to room when I returned. (for a long time)
3. He was working in a fast food restaurant when he found another job. (for half a year)
4. The artist was sitting in the gallery when Maria found him at last. (for 5 hours)
5. George was working as a reporter when I first met him. (since 2002)

Past Simple, Past Perfect or Past Perfect Continuous?

 Ex.22. Replace the infinitives by the Past Perfect, the Past Perfect Continuous or the Past Simple
as required.
1. He told me he _______ (not to see) much of her since he _______ (to move) to another place.
2. When I _______ (to arrive) he _______ (to stay) at the same hotel where we first _______ (to meet).
He _______ (to tell) me he _______ (to wait) for me for some time already.
3. He _______ (to consult) his watch nervously several times before he _______ (to see) her at the end
of the platform.
4. He _______ (to write) and _______ (to tear) up more than one letter when at last he _______ (to
find) the necessary form of address.
5. At the end of the week the fishermen _______ (to think) they _______ (to sail) long enough to reach
the shore, and as there _______ (to be) no land in sight, they _______ (to understand) that they
_______ (to lose) their course and _______ (to follow) the wrong route.
6. It _______ (not to rain) for more than two months, and the fruits _______ (to fall) before they
_______ (to become) ripe, when one August night the people _______ (to be roused) by the sound of
heavy drops beating against the roofs and window-panes. With the rain there _______ (to come) hope.

Ex.23. Choose the verb in the box and complete the sentence with the correct form of the verb.
(Past Perfect, Past Perfect Continuous or Past Simple)
understand, call, have, receive, slip, refuse, miss, finish, lose, enter, be ready

1. I ______ to give a definite answer before I ______ a letter from him.

2. We ______ to stay at the station for the night because we _____ the last train.
3. When Emma _____ reading the letter she _____ that she _____Arthur forever.
4. She hardly _____ the letter into her pocket when Martini _______ the room.
5. Their friends ______ them before they ______ .

carry, drop, bring, drive, achieve, keep, come, practice, expect, master

6. They _______ the car for many hours before they _______ to the crossroad.
7. The scientists ______ out a dozen experiments before they _____satisfactory results.
8. The pianist ______ the passage hour after hour until he ______ it.
9. My watch ______ good time before I _______ it.
10. At last the postman ______ a letter which I _______ several weeks.

Ex.24. Open the brackets and use the proper tense (Past Simple, Past Continuous, Past Perfect or
Past Perfect Continuous).
1. When he ______ (arrive), I ______ (live) in London for a week.
2. We ______ (read) while he ______ (eat).
3. When Jack ______ (phone) me, I ______ (write) a letter.
4. When my friend ______ (come), I ______ (do) an exercise for an hour.
5. The library ______ (close) by the time I ______ (get) there .
6. I ______ (drive) home when I ______ (hear) the news on the radio.
7. They always ______ (have) loud parties which ______ (go on ) till the early hours.
8. We ______ (walk) for some hours before we ______ (realize) that we ______ (lose) our way.
9. No sooner I ______ (complain) that I ______ (not hear) from them for a long time than the letter
______ (come).
10. The concert was a great success. When the pianist ______ (finish) his part, the audience ______
(applaud) the orchestra for some minutes.
11. It was the poorest room he ever ______ (see).
12. No sooner she ______ (come) to the station than a fast train from Glasgow______ (arrive).
13. I ______ (drive) home when I ______ (hear) the news on the radio.
14. I ______ (finish) my work by afternoon and ______ (sit) quietly in my study thinking of the days
that ______ (pass) by.
15. The storm already ______ (die) away , but very far off the thunder still ______ (mutter).

Ex.25. Correct the mistakes if there are any.

1. I already had gone to bed and had fallen asleep when my brother knocked at the door and asked me
to get up.
2. By the time the guests were coming, she was not ready.
3. I had not been listening, so I missed what she had said.
4. By 9 o’clock he finished work. He went outside. The rain had stopped but it was rather cool.
5. They had been studying all morning, so they were tired.
6. She broke the glass when she washed it.
7. They were looking for the money since morning but they couldn’t find it anywhere.
8. The shop has closed by the time I got there.
9. At last I bought a piece of furniture which I expected for a month.
10. All the staff were working very long hours all week long.

Ex.26. Translate into English.

1.Студенти закінчили підготовку до конференції до 30 жовтня.
2. Вони були друзями вже 10 років, перш ніж я познайомився з ними.
3. Секретарка віддала листа лише після того, як я сповістив своє ім’я.
4. Вона прийшла на роботу і згадала, що забув вдома гаманця.
5. Мої сусіди сказали, що провели відпустку в Альпах.
6. Ми думаємо, що він прийняв правильне рішення.
 7. Вони вирішили залишитись вдома, тому що були втомлені.
8. Ми подивились фільм перш ніж обговорили його.
9. Я була в Лондоні минулого року. Раніше я там ніколи не була.
10. Я прочекала на зупинці 20 хвилин перш ніж прийшов трамвай.

PAST TENSES REVIEW

Ex.27. Identify the tenses, then match the sentences on the left with their functions on the right.

1. The young people were dancing to a loud
music when I entered the room.
2. She finished writing the course paper
yesterday.
3. Mike had made a report before his boss
asked him about it.
4. When they were playing in the attic, they
found a rare book.
5. They redecorated the house when they
moved to New York.
6. They had been redecorating the house for a
year before they moved in.
7. The office workers had already locked the
door when the alarm went off.
8. In the middle of the party, when they were
having fun, the storm hit.
9. They started the company in 1999.
10. The students were cheating while they
were writing the test.
11. They locked the door, gave the keys to the
guard and went home.
12.The company’s funds had run out by the
end of the year.
a - an action which happened at a specific
time in the past;
b-actions which took place immediately one
after another in the past;
c -an action which was in progress before
another action interrupted it;
d -an action which was completed before
another action in the past;
e -two or more actions were in progress
simultaneously;
f -an action which was completed before some
specific time in the past.
g-an action which lasted for some time in the
past before another action or a stated time in
the past

Ex.28. Final test. Simple Past, Past Continuous, Past Perfect, or Past Perfect Continuous? Choose
the right answer.
1. He _______ a new car last year.
a. bought b. was buying c. had bought d. had been buying
2. He _______ London two years ago.
a. visited b. was visiting c. had visited d. had been visiting
3. I _______ yesterday because I was sick.
a. didn't work b. wasn't working c. hadn't worked d. hadn't been working
4. She fell asleep while she _________ TV.
a. watched b. was watching c. had watched d. had been watching
5. She probably lost her keys while she ________ in the park.
a. walked b. was walking c. had walked d. had been walking
6. He _________ at four o'clock yesterday.
a. slept b. was sleeping c. had slept d. had been sleeping
7. First he ________ as a salesman, then as a night clerk, and after that he quit his job and became a
writer.
a. worked b. was working c. had worked d. had been working
8. Christopher Columbus ________ America in 1492.
a. discovered b. was discovering c. had discovered d. had been discovering
9. By the time I came back, Mike and Jane______, so I couldn't tell them about it.
a. already left b. were already leaving c. had already left d. had already been leaving
10. It ________ me two hours to get to the airport.
a. took b. was taking c. had taken d. had been taking
11. Their car was stolen while they________ lunch at a cafe.
a. ate b. were eating c. had eaten d. had been eating
12. When he lived in Mexico, he ________ in a bank.
a. worked b. was working c. had worked d. had been working
13. He ________ for his bus at the bus stop when the robbers attacked him.
a. waited b. was waiting c. had waited d. had been waiting
14. She _______ all the letters by the time her boss asked her to type them again.
a. sent b. was sending c. had sent d. had been sending
15. Until last night, she _______ him about it.
a. never asked b. was never asking c. had never asked d. had never been asking
16. By the time we arrived, she _______ for us at the train station for three hours.
a. waited b. was waiting c. had waited d. had been waiting

Ex.29. Complete the story by putting the verbs in brackets into the correct tense. You can choose
from the Present Perfect, Past Simple, Past Continuous, Past Perfect or Past Perfect Continuous.
My English is really getting better. I ______ (try) to learn the language since 2005, but only
recently have I been able to make some real progress. By the time I started high school in 2008, I
______ (study) the language for almost three years; however, I was only able to introduce myself and
utter a few memorized sentences. For a couple more years, I ______ (struggle) through grammar and
 vocabulary lessons, which made absolutely no difference. Nothing worked, so I decided to study
abroad.
I ______ (find) an exchange program in England that ______ (sound) like the perfect answer. I
______ (stay) with a host family for one month. It was a huge disappointment! I ______ (sit) there the
whole time staring at the host mother and father hoping that there would be some breakthrough.
Nothing.
When I returned, I mentioned to a friend that I ______ (have) problems with the language for
years. He recommended that I spend a year in an English speaking country. I decided to go abroad
again. I ______ (research) exchange programs for a couple of weeks and finally (decide) on a school
in the United States.
Well, it ______ (work). I ______ (live) and ______ (study) in the U.S. for more than two
years. I ______ (stay) here for at least another year before I return home. By then, I should be
completely fluent.

Ex.30. Choose the correct form of the verb.

1.They are happy their child _______ the University.
a) entered b) has entered c) had entered
2. They were happy their child_______ the University.
a) entered b) has entered c) had entered
3. At this time two weeks ago we _______ on the beach.
a) lay b) were lying c) lied
4. I was glad he _______ from this business trip.
a) returned b) has returned c) had returned
5. I _______ impressed with his car when I saw it yesterday.
a) hasn’t been b) wasn’t c) hadn’t been.
6. My parents were angry because I ________ my last exam.
a) hasn’t passed b) didn’t pass c) hadn’t passed
7. When she came home, her son _______ .
a) had dinner b) have dinner c) is having dinner
8. Our manager signed the documents and _______ upstairs.
a) has gone b) went c) had gone
9. How many times _______ him since he went to London?
a) did you see b) have you seen c) saw
10. Mary (1) _______ the room while John (2) ________ the dinner.
(1) a) cleans b) was cleaning c) has cleaned
(2) a) makes b) has made c) was making

Ex.31. Correct the mistakes if there are any.

1. The man was standing at the bus stop for the last half an hour.
2. I remembered I haven’t paid the bill last month.
3. I called the station for an hour yesterday but no one answered.
4. She was standing near the shelf and trying to find the book on economic theory.
5. Richard tried to come in quietly but his mother didn’t sleep and was hearing him.
6. I hadn’t seen Michael for some time. I missed him greatly.
7. He used to playing the violin when he lived with his grandparents.
8. I had been played chess for 3 years before I participated in a lightning tournament five years ago.
9. I went to England to improve my English but it hadn’t helped.
10. There were a very good program on TV last night.

Ex.32.Translate into English.

1. Я слухала подругу вже пів години, але так і не зрозуміла про що йшлося.
2. Минулого тижня я зустрівся з менеджерами, провів перемовини, відправив десятки листів і
нарешті поїхав у відпустку.
3. Коли він прийшов, вона вже повернулась та сиділа біля каміну.
4. Не встигла я приїхати до готелю, як задзвонив телефон і ми пішли на зустріч в конференц зал.
5. Професор все ще екзаменував студентів, коли прийшов декан.
6. Ми бувало грали у футбол всім офісом у суботу.
7. Стажери тренувались вже три години, коли тренер сказав зробити перерву.
8. Коли ви закінчили проект? - Ми ще не закінчили. Ми пропрацювали три місяці над ним, але
ще не дійшли згоди щодо рекламної кампанії.
9. Йшов сильний сніг. Я не змогла прочитати номер тролейбуса. Я проїхала вже три зупинки,
коли зрозуміла, що їхала не в тому напрямку.
10. Я дзвонила вам дві години, але телефон був зайнятий.
11. Ми ще не встигли вийти на вулицю, як прибуло таксі.
12. Студенти писали тест вже пів години, коли увійшов декан і попросив їх заповнити анкети.
13. Ми працювали над проектом пів року коли наш товар з’явився на ринку.
14. Вони прибули о третій вночі і все ще відпочивають.
Скільки часу тривала дискусія, перш ніж вони прийшли до компромісу?