И.П. Агабекян, П.И. Коваленко 15 страница

Entrepreneurship

Closely associated with labor is the concept of entrepreneurship, the managerial or organizational skills needed by most firms to produce goods and services. The entrepreneur brings together the other three factors of production. When they are successful, entrepreneurs earn profits. When they are not successful, they suffer losses. The reward to entrepreneurs for the risks, innovative ideas and efforts that they have put into the business, they obtain the money that remains after the owners of land, labor and capital have received their payments.

^Text 5

THE BASIC ECONOMIC PROBLEM

The central problem of economics is to determine the most efficient ways to allocate the factors of production and solve the problem of scarcity created by society’s unlimited wants and limited resources. In doing so, every society must provide answers to the following three questions:

1. What goods and services are to be produced, and in what quantities are they to be produced?

2. How are those goods and services to be produced?

3. Who will receive and consume (get to use) those goods and services?

The solution of these questions depends on the economic system of each particular society.

Vocabulary

overall output — общий объем производства cause-and-effect relationships - причинно-следственные связи production and consumption

— производство и потребление

factors of production - факторы производства natural resources — природные ресурсы human resources — челове

ческие ресурсы capital and entrepreneurship - капитал и предпринимательство return or reward — доход или вознаграждение wildlife and timber resources

— живая природа и ресурсы древесины to allocate the factors of production - размещать факторы производства to postpone — откладывать

Задание 1.2. Answer the questions:

1. What’s the difference between macroeconomics and microeconomics? What questions does macroeconomics examine? What questions does microeconomics examine?

2. What are the factors of production?

3. What is the fuel that drives the economy?

4. What are the natural resources?

5. What is called «the price paid for the use of labor»?

6. What is the capital?

7. What is the role of entrepreneurship in production?

LESSON 2

Text 1 ECONOMIC SYSTEMS

An economic system is the way in which a country Uses its available resources (land, workers, natural resources, machinery etc.) to satisfy the demands of its inhabitants for goods and services. The more goods and services that can be produced from these limited resources, the higher the standard of living enjoyed by the country’s citizens. There are three main economic systems:

1. Planned economies

Planned economies are sometimes called «command economies» because the state commands the use of resources (such as labour and factories) that are used to produce goods and services as it owns factories, land and natural resources. Planned economies are economies with a large amount of central planning and direction, when the government takes all the decisions; the government decides production and consumption. Planning of this kind is obviously very difficult, very complicated to do, and the result is that there is no society, which is completely a command economy. The actual system employed varies from state to state, but command or planned economies have a number of common features.

Firstly, the state decides precisely what the nation is to produce. It usually plans five years ahead. It is the intention of the planners that there should be enough goods and services for all.

Secondly, industries are asked to comply with these plans and each industry and factory is set a production target to meet. If each factory and farm meets its target, then the state will meet its targets as set out in the five- year plans. You could think of the factory and farm targets to be objectives, which, if met, allow the nation’s overall aim to be reached.

A planned economy is simple to understand but not simple to operate. It does, however, have a number of advantages:

•Everyone in society receives enough goods and services to enjoy a basic standard of living.

• Nations do not waste resources duplicating production.

•The state can use its control of the economy to divert resources to wherever it wants. As a result, it can ensure that everyone receives a good education, proper health care or that transport is available.

Several disadvantages also exist. It is these disadvantages that have led to many nations abandoning planned economies over recent years:

•There is no incentive for individuals to work hard in planned economies.

•Any profits that are made are paid to the government.

•Citizens cannot start their own businesses and so new ideas rarely come forward.

•As a result, industries in planned economies can be very inefficient.

A major problem faced by command or planned economies is that of deciding what to produce. Command economies tend to be slow when responding to changes in people’s tastes and fashions. Planners are likely to underproduce some items as they cannot predict changes in demand. Equally, some products, which consumers regard as obsolete and unattractive, may be overproduced.

Planners are afraid to produce goods and services unless they are sure substantial amounts will be purchased. This leads to delays and queues for some products.

Vocabulary

inhabitants — жители, население to own — владеть natural resources — природные ресурсы a large amount — большой объем central planning and

direction — центральное планирование и руководство consumption - потребление obviously — очевидно complicated - сложный to have a number of common features — иметь ряд общих черт intention - намерение to comply with — подчиняться

a production target to meet

— производственная задача (задание), которую надо выполнить an objective — цель, задача an overall aim — общая цель to enjoy a basic standard of living — иметь основной уровень жизни to duplicate production —

дублировать производство

to divert — отвлекать (напр., ресурсы на другие цели) to abandon - отказываться от чего— либо a major problem faced by command or planned economies — основная проблема, стоящая перед командной или плановой экономикой changes in tastes and fashions - изменения вкусов и моды to underproduce — недопро- изводить to regard smth as — воспринимать что— либо, относиться к чему— либо как...

obsolete (syn. out of date) —

устарелый, вышедший из употребления to overproduce - перепроизводить delays and queues — зд. перебои (с товарами) и очереди

Задание 2.1. Answer the questions:

1. What is an economic system?

2. What does a standard of living depend on?

3. What is a planned economy?

4. What are the main features of a planned economy?

5. What are the advantages of a planned economy?

6. What are the disadvantages of a planned economy?

7. What causes delays and queues for some products?

8. What are other advantages and disadvantages of a planned economy?

^^Задание 2.2. Find Russian equivalents to the following:

1. each factory is set a production target to meet

2. to divert resources to wherever it wants

3. new ideas rarely come forward

4. tend to be slow when responding to changes

^^Задание 2.3. Find synonyms for the words in italics:

Obsolete products; it can ensure that; it can be very inefficient.

There is no incentive for individuals to work hard in planned economies.

It led to many nations abandoning planned economies over recent years.

^^Задание 2.4. Find in the text English equivalents for the following:

1. имеющиеся в распоряжении ресурсы

2. управлять использованием ресурсов

3. управление экономикой

4. отказываться от плановой экономики

5. иметь высокий жизненный уровень

6. иметь общие черты

7. подчиняться 5-летнему плану

8. значительное количество

9. ставить производственные задачи

10. полученная прибыль

11. стимул к эффективной работе

12. перебои и очереди

13. реагировать на изменения спроса

14. предсказывать изменения спроса

15. основная проблема, стоящая перед...

^"Задание 2.5. Translate into English:

1. Если хозяйство плановое, то работа промышленности подчиняется плану, в котором государство определяет производственные задачи и планирует развитие на 5 лет вперед.

2. В плановой экономике покупатели лишены возможности влиять на производство товаров.

3. Поскольку значительная доля полученной прибыли должна быть выплачена государству, то в условиях плановой экономики стимулы работать эффективно невелики.

4. Промышленность часто выпускает непривлекательные и старомодные товары, поскольку невозможно предсказать изменения моды на 5 лет вперед.

5. Государство в условиях плановой экономики может гарантировать своим гражданам образование и медицинское обслуживание.

6. Все крупные решения, касающиеся объема используемых ресурсов, структуры и распределения продукции, производства и потребления, принимаются центральным плановым органом.

^Text 2 ECONOMIC SYSTEMS

2. Market economies

In a true market economy the government plays no role in the management of the economy, the government does not intervene in it. The system is based on private enterprise with private ownership of the means of production and private supplies of capital, which can be defined as surplus income available for investment in new business activities. Workers are paid wages by employers according to how skilled they are and how many firms wish to employ them. They spend their wages on the products and services they need. Consumers are willing to spend more on products and services, which are favoured. Firms producing these goods will make more profits and this will persuade more firms to produce these particular goods rather than less favoured ones.

Thus, we can see that in a market economy consumers decide what is to be produced. Consumers will be willing to pay high prices for products they particularly desire. Firms, which are privately owned, see the opportunity of increased profits and produce the new fashionable and favoured products.

Such a system is, at first view, very attractive. The economy adjusts automatically to meet changing demands. No planners have to be employed, which allows more resources to be available for production. Firms tend to be highly competitive in such an environment. New advanced products and low prices are good ways to increase sales and profits. Since all firms are privately owned they try to make the largest profits possible. In a free market individual people are free to pursue their own interests. They can become millionaires, for example. Suppose you invent a new kind of car. You want to make money out of it in your own interests. But when you have that car produced, you are in fact moving the production possibility frontier outwards. You actually make the society better-off by creating new jobs and opportunities, even though you become a millionaire in the process, and you do it without any government help or intervention.

Not surprisingly there are also problems.

Some goods would be underpurchased if the government did not provide free or subsidized supplies. Examples of this type of good and service are health and education. There are other goods and services, such as defence and policing, that are impossible to supply individually in response to consumer spending. Once defence or a police force is supplied to a country then everyone in this country benefits.

A cornerstone of the market system is that production alters swiftly to meet changing demands. These swift changes can, however, have serious consequences. Imagine a firm, which switches from labour-intensive production to the one where new technology is employed in the factory. The resulting unemployment could lead to many social as well as economic problems.

In a market economy there might be minimal control on working conditions and safety standards concerning products and services. It is necessary to have large-scale government intervention to pass laws to protect consumers and workers.

Some firms produce goods and then advertise heavily to gain sufficient sales. Besides wasting resources on advertising, firms may also duplicate one another’s services. Rival firms, providing rail services, for example, could mean that two or more systems of rail are laid.

Finally, firms have to have confidence in future sales if they are to produce new goods and services. At certain times they tend to lack confidence and cut back on production and the development of new ideas. This decision, when taken by many firms, can lead to a recession. A recession means less spending, fewer jobs and a decline in the prosperity of the nation.

312 I Английский для экономистов

Vocabulary

to own and run (to manage, to operate) businesses - владеть и управлять бизнесом to intervene - вмешиваться private enterprise

(entrepreneurship) — частное предпринимательство private ownership

(property) of the means of production — частная собственность на средства производства public property, common ownership — общественная собственность personal property - личная собственность state-owned property, state ownership - государственная собственность private supplies of capital

— частный капитал surplus income available for investment in new business activities — дополнительный доход (излишек дохода), который можно вложить (инвестировать) в новое дело (бизнес) to employ - использовать; предоставлять работу, нанимать employer — работодатель employee — служащий employment — занятость unemployment - безработица to persuade — убеждать at first view (at first sight)

— на первый взгляд to adjust automatically — автоматически приспосабливаться; приводиться в соответствие competitive — конкурентоспособный to make the largest profits possible — получить наибольшую возможную прибыль to pursue one’s own

interests — преследовать свои интересы to make money out of it — заработать деньги на этом

to move the production possibility frontier outwards - продвинуть вперед предел производственных возможностей to make the society better- off — сделать общество более состоятельным to create new jobs and opportunities - создать новые рабочие места, новые возможности to underpurchase — недостаточно раскупать to provide free or

subsidized supplies — обеспечить бесплатное или субсидированное (дотированное) предоставление (товаров, услуг)

in response to (in answer

to) — в ответ на a cornerstone — краеугольный камень to alter swiftly — быстро меняться consequences — последствия labour-intensive

production — трудоемкое производство working conditions — условия работы safety standards — нормы техники безопасности

large-scale intervention —

широкомасштабное вмешательство to pass laws — принимать законы to gain sufficient sales - добиться достаточного объема продаж rival firms — фирмы-

конкуренты, соперники to have confidence — иметь уверенность to lack confidence — не хватать уверенности

^"Задание 2.6. Answer the questions:

1. What is a market economy?

2. What is the mechanism of producing goods and services in a market economy?

3. In what way do changing demands affect production in a market economy?

4. What is the main difference between a market economy and a planned economy?

5. What are the advantages of a market economy?

6. What are the disadvantages of a market economy?

Задание 2.7. Find the Russian equivalents to the following:

1. new advanced products;

2. products which are favoured;

3. they try to make the largest profits possible;

4. provide free or subsidized supplies;

5. produce goods and then advertise heavily;

6. a firm which switches from labour-intensive production to a new one;

7. a decline in the prosperity of the nation

^^Задание 2.8. Find the synonyms for the words in italics:

businesses owned and run by the state; products and services, which are favoured; at first view;

production alters swiftly.

^^Задание 2.9. Find in the text English equivalents for the following:

1. процветание нации

2. управление экономикой

3. быстро меняться

4. широкомасштабное вмешательство правительства

5. принимать законы

6. конкурирующие фирмы

7. автоматически изменяться (приспосабливаться)

8. быть конкурентоспособным

9. частные фирмы

10. фирмы, принадлежащие государству и управляемые им

11. краеугольный камень

12. иметь серьезные последствии для ...

13. трудоемкое производство

14. сокращать производство

15. быть уверенным в ...

16. не хватает уверенности в ...

17. дорого платить за что-либо

^^Задание 2.10. Translate into English:

1. В рыночной экономике невелика или очень мала необходимость в планировании, контроле и широкомасштабном вмешательстве со стороны государства (правительства) в экономический процесс.

2. В условиях рыночной экономики изменения потребительского спроса играют заметную роль в формировании политики фирм.

3. Чтобы быть конкурентоспособными и увеличивать доходы, фирмы должны постоянно изучать спрос и менять свою деятельность в ответ на его изменения.

4. Чем более модный товар, тем более высокую цену надо за него платить.

5. Некоторые виды услуг, например здравоохранение и образование, не могут быть полностью обеспечены только частными фирмами.

6. Рыночная экономика характеризуется частной собственностью на ресурсы и использованием системы рынков и цен для управления экономической деятельностью.

7. В такой системе каждый ее участник волен преследовать свои собственные интересы; каждая экономическая единица стремится получить наибольший возможный доход на основе индивидуального принятия решений.

ECONOMIC SYSTEMS

3. Mixed economies

Command and market economies both have significant faults. Partly because of this, an intermediate system has developed, known as mixed economies.

A mixed economy contains elements of both market and planned economies. At one extreme we have a command economy, which does not allow individuals to make economic decisions, at the other extreme we have a free market, where individuals exercise considerable economic freedom of choice without any government restrictions. Between these two extremes lies a mixed economy. In mixed economies some resources are controlled by the government whilst others are used in response to the demands of consumers.

Technically, all the economies of the world are mixed. Some countries are nearer to command economies, while others are closer to free market economies.

The aim of mixed economies is to avoid the disadvantages of both systems while enjoying the benefits that they both offer. So, in a mixed economy the government and the private sector interact in solving economic problems. The state controls the share of the output through taxation and- transfer payments and intervenes to supply essential items such as health, education and defence, while private firms produce cars, furniture, electrical items and similar, less essential products.

The UK is a country with mixed economy. Some services are provided by the state (for example, health care and defence) whilst a range of privately owned businesses offer other goods and services.

Vocabulary

significant faults — значительные недостатки at one extreme... at the other extreme — на одном полюсе... на другом to exercise considerable economic freedom of choice — иметь значительную экономическую свободу выбора restriction — ограничение whilst [wails t] = while - в то время как, пока state-controlled industry - промышленность, контролируемая государством

to avoid disadvantages —

избегать недостатков to enjoy the benefits — иметь преимущества, пользоваться преимуществами to interact — взаимодействовать

to solve economic problems

— решать экономические проблемы a share of the output - доля в объеме производства essential items — товары и услуги первой необходимости

a range of businesses - зд.

ряд компаний, фирм

^^Задание 2.11. Answer the questions:

1. Do really pure examples of planned and market economies exist in the world?

2. What is a mixed economy? What is its aim?

3. What type of economy has the UK?

4. What type of economy is in Russia now?

^^Задание 2.12. Find Russian equivalents to the following:

an intermediate system has developed; to supply essential items;

the government controls a share of the output

^^Задание 2.13. Find synonyms to the words in italics: significant faults, a range of products; whilst others are used in response to the demands of consumers

^^Задание 2.14. Find in the text English equivalents for the following:

1) избегать недостатков

2) частный сектор

3) налогообложение

4) централизованно принимать экономические решения

5) на одном полюсе — на другом ...

6) без ограничений

7) взаимодействовать в решении проблем

8) пользоваться благами

9) правительство, возглавляемое ...

^^Задание 2.15. Translate into English:

1. В реальной действительности экономические системы находятся где-то между чисто рыночной и

плановой экономикой. Смешанная экономика — это система, при которой частная собственность и рынок, а также правительство и общественные институты, энергично участвующие в обеспечении экономической стабильности и перераспределении доходов, взаимодействуют в решении экономических проблем.

LESSON 3

MAIN ECONOMIC LAWS

<^Text 1 SUPPLY, DEMAND AND MARKET PRICE

What? How? Who?

Every society must provide answers to the same three questions:

• What goods and services will be produced?

• How will those goods and services be produced?

• Who will receive them?

Societies and nations have created different economic systems to provide answers to these fundamental questions. Traditional economies look to customs and traditions for their answers while others, known as command economies, rely upon governments to provide the answers. In free enterprise systems, market prices answer most of the What, How and Who questions.

Because market prices play such an important part in free enterprise systems, those systems are often described as «price directed market economies.» Supply and demand are the forces that determine what prices will be.

Prices In A Market Economy

Prices perform two important economic functions: They ration scarce resources, and they motivate production. As a general rule, the more scarce something is, the higher its price will be, and the fewer people will want to buy it. Economists describe this as the rationing effect of prices.

In a market system goods and services are allocated, or distributed, based on their price.

Price increases and decreases also send messages to suppliers and potential suppliers of goods and services. As prices rise, the increase serves to attract additional producers. Similarly, price decreases drive producers out of the market. In this way prices encourage producers to increase or decrease their level of output. Economists refer to this as the production-motivating function of prices. But what causes prices to rise and fall in a market economy? The answer is Demand!

<^Text 2 THE LAW OF DEMAND

Demand is a consumer’s willingness and ability to buy a product or service at a particular time and place.

The law of demand describes the relationship between prices and the quantity of goods and services that would be purchased at each price. It says that all else being equal, more items will be sold at a lower price than at a higher price.

Demand behaves the way it does for some of the following reasons:

More people can afford to buy an item at a lower price than at a higher price.

Let’s see the law of demand from the point of icecream selling

At a lower price some people will substitute ice-cream for other items (such as candy bars or soft drinks), thereby increasing the demand.

At a higher price some people will substitute other items for ice cream.

How many ice-creams can a man eat? One, two, more? Some people will eat more than one if the price is low enough. Sooner or later, however, we reach the point where enjoyment decreases with every bite no matter how low is the cost. What is true of ice-cream applies to most everything. After a certain point is reached, the satisfaction from a good or service will begin to diminish. Economists describe this effect as diminishing marginal utility. «Utility» refers to the usefulness of something. Thus «diminishing marginal utility» is the economist’s way of describing the point reached when the last item consumed will be less satisfying than the one before.

Diminishing marginal utility helps to explain why lower prices are needed to increase the quantity demanded. Since your desire for a second ice-cream is less than it was for the first, you are not likely to buy more than one, except at a lower price. At even lower prices you might be willing to buy additional ice-creams and give them away.

<^Text 3

Elasticity Of Demand

The shape and slope of demand curves for different products are often quite different. If, for example, the price of a quart of milk were to triple, from $.80 to $2.40 a quart, people would buy less milk. Similarly, if the price of all cola drinks were to jump from $1 to $3 a quart (an identical percent increase), people would buy less cola. But even though both prices changed by the same percentage, the decrease in milk sales would probably be far less than the decrease in cola sales. This is because people can do without cola more easily than they can do without milk. The quantity of milk purchased is less sensitive to changes in price than is the quantity of cola. Economists would explain this by saying that the demand for cola is more elastic than the demand for milk.

Elasticity describes how much a change in price affects the quantity demanded.

How Elasticity is Measured

When the demand for an item is inelastic, a change in price will have a relatively small effect on the quantity demanded. When the demand for an item is elastic, a small change in price will have a relatively large effect on the quantity demanded.

Elasticity can also be measured by the «revenue test.» Total revenue is equal to the price multiplied by the number of units sold.

If, following a price increase, total revenue falls, the demand would be described as elastic. If total revenue were to increase following a price increase, the demand would be be inelastic. Similarly, if total revenue increased following a price decrease, demand would be elastic. If the price decrease led to a decrease in total revenue, the demand for the item would be described as inelastic.

Why the Demand for Some Goods and Services Is Inelastic

The demand for some goods and services will be inelastic for one or more of the following reasons:

• They are necessities.

• It is difficult to find substitutes. Cola drinkers can switch to other soft drinks, but there are few substitutes for milk.

• They are relatively inexpensive. People are less apt to change their buying habits when the price of something that is relatively inexpensive is increased or decreased. If, for example, the price of an item were to double from 10 cents to 20 cents, it would have less of an effect on demand than if the price had gone from $250 to $500.

• It is difficult to delay a purchase. When your car is running out of gas you will buy it at the nearest gas station at any price.

Changes in Demand

Until now, we have been describing the relationship between an item’s price and the quantity of an item people will purchase. Sometimes things happen that change the demand for an item at each and every price. When this occurs, we have an increase or a decrease in demand.

What are some of the factors that would cause the demand for ice cream, or any other product, to increase or decrease at each and every price?

Substitutes

When two goods satisfy similar needs, they are described as substitutes. A change in the price of one item will result in a shift in the demand for a substitute.

Black and brown shoes are close substitutes. If the price of black shoes goes up, then people will tend to substitute brown shoes for black shoes, and the demand curve for brown shoes will shift out at every price. If the price of black shoes goes down, then people will tend to substitute black shoes for brown shoes, and the demand curve for brown shoes will shift in at every price.

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