Vocabulary list. Grammar: present Perfect II

Unit V

Topic: Market

Grammar: Present Perfect II

Communication Skills: Telephoning (Part II)

SECTION A

	1.	raw material — сырье
	2.	labour — труд, работа
	3.	entrepreneurship — предпринимательство
	4.	to utilize — использовать
	5.	revenue — доход (годовой, особенно государственный)
	6.	free enterprise — свободное предпринимательство
	7.	transaction — сделка
	8.	market economy — рыночная экономика
	9.	factor of production — фактор производства
	10.	income — доход
	11.	to supply — обеспечивать, снабжать
	12.	supply — предложение, снабжение
	13.	demand — спрос, требование
	14.	to exceed — превышать
	15.	input — вложение
	16.	to guide — направлять, определять
	17.	output — выпуск, продукция
	18.	to govern — управлять, регулировать
	19.	preference — предпочтение
	20.	production costs — издержки производства
	21.	to determine — определять
	22.	interaction — взаимодействие
	23.	to be subject to smth — быть подверженным чему-либо, подчиняться
	24.	recession — спад производства
	25.	business cycle — экономический цикл, цикл деловой активности
	26.	to alternate — чередовать(ся)
	27.	trait — характерная черта, особенность
	28.	opportunity costs – альтернативные издержки
	29.	an opportunity forgone — упущенная возможность
	30.	to reduce the debt — уменьшить долг
	31.	to assess smth — оценить, подсчитать
	32.	in monetary terms — в денежном выражении

NOTES:

1. the needy — нуждающиеся

2. given the scarcity of resources — с учетом (в условиях) недостатка ресурсов

3....fiscal and monetary policy being the major factors —... причем бюджетно-налоговая и кредитно-денежная политика являются основными факторами

■ Ex. 1. Choose a suitable title for the passage from the list below. Support your point of view.

1. Economic resources.

2. Economic environment.

3. Role of the market.

Economic resources may be classified as material resources (raw materials and capital) and labour resources (labour force and entrepreneurship). Scarcity of resources makes it necessary to save them. As a result any economic system is trying to find most effective and efficient ways of utilizing resources for the production of goods and services. The rational solution of the problem brings about the maximum economic growth, full employment, stable prices, equitable distribution of revenues, and social security of the needy.

There are different economic systems in the world today. Many economists argue that free enterprise, or the market economy is the most effective system, because the businesses are free to choose whom to buy from and sell to on what terms, and free to choose whom to compete with. How can a market economy solve what, how and for whom to produce?

It is done through a market, which is a set of arrangements through which buyers and sellers make contact and business, in which choices concerning the allocations of production, incomes, goods and services are left to countless independent decisions of individual consumers and producers acting on their own behalf.

One of the main laws of the market is the law of supply and demand. For a given market of a commodity, demand shows the quantity that all prospective buyers will be prepared to purchase at each unit price of the good. The law of demand states that the higher the price of a product, the less of it people would be willing to buy. Supply is the relation between the price of a good and the quantity available for sale from suppliers (such as producers) at this price. The higher the price at which the good can be sold, the more of it producers will supply. The higher price makes it profitable to increase production. Thus, the law of supply and demand says that if demand exceeds supply, the price tends to rise and when supply exceeds demand the price tends to fall.

Given the scarcity of resources, the market functions as a rationing device with the price mechanism and its principal mechanism. In free markets, prices direct allocations of inputs of firms that make the most profitable use of them. The price mechanism also guides the decisions of producers concerning the compositions of their output. Finally the price mechanism also governs the distribution process.

Thus, the market mechanism brings about an allocation of resources that reflects two basic factors: consumer preferences and production costs. The prices which play the coordinating role of the market mechanism are determined through the interaction of demand and supply.

Freedom of enterprise is not total in the market economy. Businesses are subjects to laws and government regulations. No pure market economy exists. Thus, almost all economies in the world today are mixed economies which combine varying degrees of market and command economy traits. For example, in the United States there are more market economy traits than in Western European countries.

Economic machines do not always run smoothly. They are subject to a business cycle that alternates between periods of recessions in which outputs fall and unemployment rises.

Opportunity costs are caused by the situation when you want to buy something and another thing but you cant have one of them so that becomes your opportunity cost. In economics, opportunity cost, or economic cost, is the cost of something in terms of an opportunity forgone (and the benefits which could be received from that opportunity), or the most valuable forgone alternative (or highest-valued option forgone), i.e. the second best alternative.

For example, if a city decides to build a hospital on vacant land it owns, the opportunity cost is the value of the benefits forgone of some other thing which might have been done with the land and construction funds instead. In building the hospital, the city has forgone the opportunity to build a sporting center on that land, or a parking lot, or the ability to sell the land to reduce the city's debt, since those uses tend to be mutually exclusive. Also included in the opportunity cost would be what investments or purchases the private sector would have voluntarily made if it were not taxed to build the hospital. The total opportunity costs of such an action can never be known with certainty (and are sometimes called "hidden costs" or "hidden losses", what has been prevented from being produced cannot be seen or known).

Opportunity cost need not be assessed in monetary terms, but rather can be assessed in terms of anything which is of value to the person or persons doing the assessing (or those affected by the outcome). For example, a person who chooses to watch, or to record, a television program cannot watch (or record) any other at the same time.

Note that opportunity cost is not the sum of the available alternatives, but rather of benefit of the best alternative of them. The opportunity cost of the city's decision to build the hospital on its vacant land is the loss of the land for a sporting center, or the inability to use the land for a parking lot, or the money which could have been made from selling the land, or the loss of any of the various other possible uses — but not all of these altogether because the land cannot be used for more than one of these purposes.

However, most opportunities are difficult to compare. Opportunity cost has been seen as the foundation of the marginal theory of value as well as the theory of time and money.

■ Ex. 2. Answer the following comprehension questions, based on the text.

1. How can economic resources be classified?

2. What is the most efficient economic system?

3. How does the market operate?

4. What is the price determined be?

5. What role does the price mechanism play in free-market economy?

6. What does the allocation of resources reflect?

7. What does the law of supply and demand say?

8. Why is freedom of enterprise not total in the market economy?

9. What stands for the notion “opportunity costs”? Is it necessarily assessed in monetary terms?

■ Ex. 3. Say whether the following statements are TRUE or FALSE according to the text.

1. Any economic system is trying to find the most effective ways of utilizing resources because of their scarcity.

2. If the resources are used rationally the economy enjoys maximum growth and stability.

3. Many economists are of the opinion that the market economy is imperfect because freedom of enterprise is not total in this economy.

4. Even in the market economy business are subject to laws and government regulations.

5. The market mechanism provides such an allocation of resources that economic machines always run smoothly.

6. Due to the scarcity of resources the market functions as the major mechanism for their distribution.

7. The price mechanism is a set of arrangement through which buyers and sellers make contact and do business.

8. Prices play the coordinating role in the market mechanism.

9. Opportunity cost is the sum of benefit of the best alternative rather than the sum of the available alternatives.

■ Ex. 4. Put the following sentences in the right order.

A They are also subject to a business cycle.

B Businesses are subject to laws and regulations set by the government.

C During the period of recession outputs fall and unemployment rises.

D Freedom of enterprise is not total in the market economy.

E The business cycle alternates between periods of recession.

■ Ex. 5. Be ready to render the passage in the form of a presentation. Structure your presentation according to the classical model.

SECTION В

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