READING SKILLS

Demand

The quantity demanded of a good or service is the amount that consumers plan to buy in a given period of
time. Demands are different from wants. Wants are the unlimited desires or wishes that people have from
goods or services. How many times have you thought that you would like something 'if only you could
afford it' or 'if it weren't so expensive'? Scarcity guarantees that many - perhaps most - of our wants will
never be satisfied. Demand reflects a decision about which wants to satisfy. If you demand something, then
you've made a plan to buy it.

The quantity demanded is measured as an amount per unit of time. For example, suppose a person
consumes one cup of coffee a day. The quantity of coffee demanded by that person can be expressed as
one cup per day or seven cups per week or 365 cups per year. Without a time, dimension, we cannot tell

TECHNIQUE PURPOSE METHODE

Skimming To gain a general overview
of an unfamiliar text. To
build a mental framework, or
structure, for understanding
an unfamiliar text. To
determine if the text is
relevant for your purpose.
Scanning To find a specific unknown
detail e.g. a date or statistic
or name
Close reading To gain thorough
comprehension of what the
writer is saying
Critical reading To question the writer’s
motives, methods, evidence
and conclusions.
Read quickly, do NOT read
every word. Features of the
text to read:
■ title, headings, sub-
headings;
■ abstract (this is an
excellent place to find the
general argument of a
document quickly);
■ introductory paragraph;
■ concluding paragraph; and
■ first sentence of each
paragraph (long texts).
Read quickly; do NOT read
every word. Scroll quickly
though the text to find the
detail you need.
Read carefully several times.
Your first reading should
focus on main ideas. Your
second and subsequent
reading/s should focus on
relationships, secondary
ideas and supporting
evidence.
This is done at the same time
as the second or subsequent
close reading/s. While
reading, consider:
■ how this relates to what
you already know or have
read in other sources;
■ how it relates to your
question;
■ judgements about the
quality of ideas, arguments,
evidence in this source; and
■ the writer’s purpose
whether a particular quantity demanded is large or small.

If you were trying to understand "demand" and take notes on it, your next step would be to identify the key
terms about demand in the above excerpt.

Identifying the key terms assists your understanding. You can't separate the important from the less
important information if it is only a mass of words for you.

1. Can you identify the key terms about demand?

Diagramming the concept

Diagramming is another way to consolidate your understanding of the concept. It helps you to see how the
key ideas in the concept are related.

2. Using the key words from Task 1(above), see if you can fill in the detail on the diagram
below.

Demand

 Goods/services consumers to buy

 Different from unlimited desires

 Because of , most wants not satisfied.

 Therefore, demand involves decisions of what to satisfy.

Write in your own words

When using an economics concept in your written work, it is important to be able to write it in your own
words (or paraphrase it). This demonstrates to your examiner that you understand the concept.

You can use the keywords and their relationship from your notes or diagram as the basis for your
paraphrase.

3. Using the framework above, type in below an explanation of 'demand' in your own
words.

Applying theory

This exercise focuses on applying economic theory to your Economics problems and in your written work.
As in most university subjects, this is an important aspect in writing in Economics . Your lecturers want to
see that you not only understand the theory or principles underpinning your subject, but also that you are
able to apply them to other settings.

Identifying economic principles

.Look at the example below of the application of the economic principle of "supply" to the assignment task
on electricity.

[1] In analysing the market for electricity, the supply curve would be affected
[2] because there would be an increase in supply as there is a new product on the
[3] market and everybody would want it. The law of supply states that an increase
[4] in quantity demanded would increase the price of the product and therefore less
[5] will be demanded at the new process. This factor is exogenous as it did not
[6] appear in either of the axes and affects both demand and supply curves.

4.On which lines in the above example from the assignment is the economic principle
presented?
Line 1 Line 2 Line 3

Line 4 Line 5 Line 6

Applying economic principles

5.On which lines is the application of the economics principle presented?

Line 1 Line 2 Line 3

Line 4 Line 5 Line 6

Linking economic principles to assignment topics

6.On which lines are the economic principles linked to the assignment topic?
Line 1 Line 2 Line 3

Line 4 Line 5 Line 6

Contextualising the topic

Look at the topic task for Question 7 of the assignment below, and then answer the questions as we
analyse the topic.

[1] Both illicit and legal drugs are often cited as the classic example of goods which are very price inelastic.

[2] Explain why this might be the case.

[3] Draw a demand curve illustrating price inelastic demand and explain how the curve relates to the
definition of price inelasticity of demand.
[4] Use the diagram to explain how the inelastic demand has implications for pharmaceutical company
price setting and revenue.

[5] Word limit: 750

You can see that this topic question comprises two sections:

 a contextualising sentence
 a set of directions to the student.

7.Which part of the task is the contextualising topic or sentence?

Sentence Sentence Sentence Sentence
Sentence 1
2 3 4 5

Below are some meanings of directive words.

8.See if you can match the correct word with its meaning.

1. Describe, say what they are, name.

2. Pull apart, dissect, explain the parts and how they work together to produce the result.
3. Spell out, tell in a step by step, cause and effect way the process involved.

Term Your Answer

Analyse

Explain

Identify

Economics style
This section focuses on the style suitable for writing in Economics.

Complete tasks related to the following:

 Types of thinking
 Diagrams
 Headings

9.From your analysis of the task, how would you explain the type of thinking that is
required in studying economics and completing economics assignments such as this?
Choose the examples that you think are involved in economics from the list below:
 a. Learning economics principles and retelling them to the examiner/lecturer
b. Pulling apart an economics principle so that you can explain how it works. That is, the components
of it and how the components interact/affect each other to produce the result.
c. Learning the text book off by heart and rewriting this.
d. After explaining the components of an economics principle and how it works, explaining to your
examiner/lecturer how it relates to a topic that you have been presented with.
e. All of Style D above, as well as being aware of and explaining to your reader implications, or
effects in the future, of the process that you have just explained and applied.

Option A Option B Option C

Option D Option E

Integrating graphs and diagrams in written work

In completing Economics assignments, you will need to draw graphs to explain in visual form the effect on
economic principles under certain conditions that have been presented to you in your task.

It is important that you integrate these visual representations with the text of your assignment. Not only will
this indicate to your lecturer/examiner that your thinking is organised, it will make it easier for them to follow
your written text.

You can integrate them by labelling them correctly, and then making a clear link in words for your reader
between the graph and the written information.

Look at the section from the sample assignment below, and then answer the following questions about it.

This factor was exogenous, outside the Australian model. The lower price in the United States did not
appear on either of the axes. This means a shift of the demand curve to the left, towards the origin, as the
quantity demanded has decreased.

The new demand curve (D2) now shows that at the old equilibrium price at point Z, the quantity demanded
is actually Q3. At this same price the quantity demanded before the shift was at Qb. As the diagram shows
there is now too much supplied, excess supply as at this price.

To adjust to the new equilibrium, there must be an adjustment along both the demand and supply curves.
Both curves will have movements along them. The supply curve will have a downward movement along the
supply curve meaning less is being supplied at the lower price. As the price falls the quantity demanded will
increase until the market reaches a new equilibrium between demand and supply at Q1 and P2 where
there is no further tendency to change.
Graph: Market for Australian Tertiary Education

10. Is the graph labelled?

Yes. No.

11. Could the labelling be improved?

Yes. No.

12. Does the student refer to the graph in her written text?

Yes. No.

13. Is it clear that she is referring to that particular graph?

Yes. No.

14. How could this be improved in the written text about the graph?
Choose the best responses from the examples below by clicking the box:

a) Place the written information about the graph under the graph.

b) Write "See graph" in brackets next to the information about the graph.
 c) Write something like:

"Graph 1 above explains the..."

OR

"As can be seen in Graph 1 below..."

Using headings in assignments

In all university assignments, including Economics, you should aim to make it as easy as possible for your
lecturer/examiner to follow and understand your written response. It is important to remember that your
lecturer will be reading and assessing a large number of students' assignments and they want to be able to
understand your response without too much difficulty. Using headings also indicates in a subtle way to your
lecturer that you have worked in a systematic way and that you are organised in your approach.

As you can see in the Economics assignment covered in this tutorial, there are several sections of the task
to be addressed. You need to guide your lecturer through your assignment. Using headings as "signposts"
of the sections that are being addressed at particular points is a good way of doing this.

Look at the final draft of the sample response on illicit and legal drugs. We have reproduced it for you
below.

As you can see, this response does not include any headings, even though there are three components to
the task question. You can also see that it is not easy for the lecturer to know where the different sections
of the task start and end. It would make it much easier to read in relation to the tasks if headings were
included.

Both illicit and legal drugs are often cited as the classic example of goods which are very price
inelastic.

 a) Explain why this might be the case.

 b) Draw a demand curve illustrating price inelastic demand and explain how the curve relates to
the definition of price elasticity of demand.
 c) Use the diagram to explain how inelastic demand has implication for pharmaceutical company
price setting and revenue.

[1] Elasticity is a measure of the responsiveness of quantity supplied to one of its determinants (Gans, King
and Mankiw, 1999, page 88).

[2] Illicit and legal drugs can be classed as both elastic and inelastic products because for some there can
be close substitutes found. Therefore they are not needed as much and people are not dependent on just
the one particular product. With inelastic products, when the price changes dramatically there is not a large
decrease in the quantity demanded. This shows that people who are dependent on this product have no
choice, and therefore will pay a higher price for it. These products will always be demanded.

[3] People become addicted to drugs or need them for medical reasons and therefore they will always
demand them. This means that distributors and sellers can raise their prices and people will still buy them,
there will not be a dramatic decrease in consumers if there is a sudden price increase.
[4] This shows the product is inelastic because it is may be addictive or always demanded for health
reasons. It is something that people have to have so they can live, and therefore prices can increase, as
quantity levels of consumers will not decrease dramatically.

Graph 4: Inelastic Demand Curve

[5] The inelastic demand curve is very similar to a straight line, because of the curve's almost vertical
appearance. It shows that quantity levels will only decrease by a little when price increases quite
dramatically. The two points I have drawn on the curve show this. Even when I made one dot quite a lot
higher than the other the quantity demanded didn't decrease dramatically.

Graph 5: Inelastic Demand Curve

Graph 6: Elastic Demand Curve

[6] By colouring in the difference between the two dots and the vertical and horizontal axis, you can see the
revenue gain is larger than the revenue loss (as drawn on the diagram).

[7] Whereas the other diagram is the elastic demand curve, and it shows the same two points with similar
dramatic price increases. The price increases however, show a large drop in the quantity levels. Again,
when you shade in the required areas you can see that with the same price increase the revenue loss
wedge is larger than the revenue gain. This then explains that with a dramatic price increase inelastic
companies still make a profit.

[8] By showing the two diagrams I have attempted to show that the elastic demand curve does not have
the same responses as the inelastic when it comes to price increases, and that the products which are
inelastic can absorb slight price increases and will not lose a lot of their consumers.

[9] Inelastic demand products are different from other products on the market. Usually when a products
price increases consumers may change brands or find a substitute product, and this is a way that product
prices are kept reasonable, as long as all the products don't go up all at once. This is because these
products rely on their demand to maintain their profit.

[10] Inelastic products however are not the same, they do not keep customers because their prices are
low, or because it is a well-known brand name. Pharmaceutical companies know that their market is
dependent on their products and therefore they can raise their prices. These are a product without which
the consumer would not be able to survive, that is why when there is a dramatic price increase there is not
the same decrease in quantity demand. For example the price of cigarettes has recently risen but this has
not encouraged many smokers to quit, this is because they are addicted and can't stop therefore they are
willing to pay the higher price for their nicotine fix.

15. Which paragraphs do you think respond to Subtask A of the assignment?

Paragraph
Paragraph 2 Paragraph 3 Paragraph 4 Paragraph 5
1
Paragraph
Paragraph 7 Paragraph 8 Paragraph 9 Paragraph 10
6
16. Can you think of a heading that encapsulates the requirements of Subtask A?

Look at the examples below and select the one that you consider to be the best heading for Subtask A.

Illicit and Legal Drugs

Price Inelastic Goods
Price Inelasticity and Illicit and Legal Drugs

17. Before which paragraph would you put a heading for the response to Subtask B?
Paragraph Paragraph Paragraph Paragraph Paragraph
1 2 3 4 5

Paragraph Paragraph Paragraph Paragraph Paragraph

6 7 8 9 10

18. At what point in the text would you begin Subtask C and place a heading?
Paragraph Paragraph Paragraph Paragraph Paragraph
1 2 3 4 5

Paragraph Paragraph Paragraph Paragraph Paragraph

6 7 8 9 10

19. The key areas of Subtask C are inelastic demand, pharmaceutical company price
setting and revenue, and the implications of inelastic demand for price setting and
revenue of pharmaceutical companies.

See if you can combine these concepts into an appropriate heading.

enter here...

20. Reporting Verbs

Neutral research reporting verbs such as study, investigate, research, explore, used
simply to introduce the topic studied by the source, e.g.

Smith (2009:23) investigated the effect of natural disasters on small business

Jones (2010:56) studied changes in SES organisational structure over a five year period

Please complete the following table.

 Reporting verb Aspect or job or it means…

state to indicate your source presents

something as a fact
claim to indicate your source has presented
something as fact/is advancing an
argument
point out
explain
discuss
mention/note
conclude
postulate/argue
evaluate
suggest
emphasise

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