Федеральное агентство по образованию
Государственное образовательное учреждение
высшего профессионального образования
Омский государственный технический университет
Business English
Методические указания по дисциплине «иностранный язык»
для студентов дневной и очно-заочной формы обучения по направлению 521600 « экономика» бакалавриат
Омск – 2005
Составитель: Э.Г. Беззатеева
Методические указания предназначены для студентов 1-го и 2-го курсов экономического факультета, изучающих английский язык. Данные указания являются частью УМК, разрабатываемого на кафедре иностранных языков ОмГТУ для студентов-экономистов.
UNIT 1
T
HE ECONOMIC PROBLEM
Лексический
материал
1.
Прочтите
следующие
слова
economics, sensible, essentially, true, equally, survival, conscious, however, continuity, prosperous, fortunate, extremely, sustain, peasant, inhabitant, observe, totally, directly.
2. Прочтите и переведите следующие группы слов
a vast subject, precise definitions, the basic question, the material aspects, an underlying problem, advanced countries, struggle for existence, standard of living, a large percentage, self-sufficient communities, economic independence, industrialized societies.
3. Запомните следующие слова и словосочетания
advanced countries – передовые страны
apply (v.) – применять, использовать
completely (adv.) – полностью
degree (п.) – степень
depend on (v.) – зависеть
directly (adv.) – прямо, непосредственно
effort (п.) – усилие
equally (adv.) – равным образом
essentially (adv.) – главным образом
examine (v.) – рассматривать, исследовать
extremely (adv.) – крайне
however (adv.) – однако
inhabitant (n.) – житель
means (п.) – средство
opposite (adj.) – противоположный
percentage (п.) – процент, процентное отношение
pose a question – ставить вопрос
poverty (п.) – бедность
provide (v.) – обеспечивать, снабжать
remote (v.) – далекий, не имеющий прямого отношения
satisfy wants – удовлетворять потребности
self-sufficient (adj.) – независимый в экономическом отношении
solve a problem – решать проблему
skill (я.) – умение, мастерство, квалификация
standard of living – уровень жизни
struggle for survival – борьба за выживание
sustain life – поддерживать жизнь
totally (adv.) – полностью
vast (adj.) – обширный
way (п.) – путь, способ
4.
Найдите
синонимы
среди
следующих
слов
study, precise, complex, subject, essentially, use, exact, matter, basically, mainly, apply, developed, examine, advanced, completely, help, community, totally, assistance, society, build, gift, construct, present.
5.
Найдите
антонимы
среди
следующих
слов
begin, difficult, high, poor, inside, wealth, finish, easy, low, prosperous, outside, poverty, capable, dependence, incapable, directly, large, independence, indirect, small.
6. Переведите следующие сочетания слов с русского языка на английский
точное определение, простой ответ, основной вопрос, изучение материальных сторон жизни, развитые страны, борьба за существование, уровень жизни, относительная беспомощность, без посторонней помощи, испытывать крайнюю бедность, степень экономической независимости, наблюдать противоположную ситуацию, жители городов, члены сложной экономической организации.
7.
Образуйте
3
формы
от
следующих
глаголов
to be, to have, to give, to apply, to satisfy, to live, tо study, to examine, to solve, to leave, to survive, to experience, to provide, to turn, to observe, to feed, to build, to depend, to guarantee
Текст
A
1.
Прочтите
и
переведите
текст
THE INDIVIDUAL AND SOCIETY
Most introductory textbooks on Economics begin by posing the question, 'What is Economics about? Although Economics is a vast subject and precise definitions are usually very complex, it is not a difficult matter to give a simple and sensible answer to the basic question. Economics is essentially a study of the ways in which people apply their knowledge, skills, and efforts to the gifts of nature in order to satisfy their material wants. Economies limits itself to the study of the material aspects of live, and while it is true that man cannot live by bread alone, it is equally true that he cannot live without it. An underlying problem in economics is that of survival and we must examine how people have solved or are trying to solve this problem. In the more advanced countries this may seem a very remote problem – few people, if any, are conscious of a life or death struggle for existence. In many other countries, however, the continuity of human existence is by no means assured – starvation is a very real prospect for millions of human beings.
Even in the prosperous, economically advanced countries there is an aspect of survival which attracts little or no attention from those of us fortunate enough to live in these areas. This is our relative helplessness as 'economic' individuals. The Indian peasants have an extremely low standard of living, yet, left completely to their own devices, they can survive. Such people have the abilities to sustain life without outside assistance.
A large percentage of the human race still lives in very small self-sufficient peasant communities.
These people experience great poverty, but they can provide on an individual basis, for their own survival. They have a degree of economic independence.
If we now turn to the inhabitants of New York, London, or any other great metropolitan area we must observe the opposite situation – a high standard of living together with an extreme economic dependence. The inhabitants of cities are totally incapable of providing for themselves, directly, the means of their survival. They could not feed themselves, or build their own houses. Such people depend, each and every day of their lives, on the efforts and cooperation of many thousands of specialist workers. In industrialized societies a high standard of living is possible only if the organized cooperation of large numbers of people can be guaranteed. In the economically developed countries we are rich, not as individuals, but only as members of a complex economic organization.
Лексико-грамматический материал
1. Заполните пропуски, используя следующие слова:
inhabitants
,
precise
,
prospect
,
vast
,
standard
,
percentage
,
means
,
human
1. Economics is a ... subject and … definitions are very complex.
2. Starvation is a very real... for millions of... beings.
3. The Indian peasants have an extremely low... of living.
4. A large ... of the human race still lives in small self-sufficient peasant communities.
5. The ... of cities are totally incapable of providing for … themselves the ... of their survival.
2.
Составьте
предложения
,
используя
следующие
слова
1. limits, of, economics, to, study, the, of, aspects, the, material, itself, life.
2. problem, an, is, underlying, economics, in, that, survival, of.
3. seem, may, a problem, very, this, remote, very.
4. very, starvation, a, prospect, millions, for, real, human, beings, is, of.
5. peasants, an, Indian, have, living, of, the, low, extremely, standard.
6. people, great, experience, poverty, these.
7. degree, they, a, have, economic, of, independence.
3.
Заполните пропуски предлогами
1. Most textbooks ... Economics begin ... posing the question, “What is Economics ...?”
2. Economics is essentially a study... the ways... which people apply their knowledge… the gifts... nature ...order to satisfy their needs.
3. … the more advanced countries few people are conscious ... a life or death struggle ... existence.
4. Even... the economically advanced countries there is an aspect... survival.
5. Such people have the abilities to sustain life... outside assistance.
6. If we now turn ... the inhabitants of New York we must observe the opposite situation – a high standard ... living together ... an extreme economic dependence.
7. The inhabitants... cities are totally incapable ... providing ... themselves the means ... their survival.
8. Such people depend ... the efforts... many thousands ... specialist workers.
9. ... industrialized societies a high standard ... living is possible only if the organized cooperation ... large numbers ... people can be guaranteed.
10. ... the economically developed countries we are rich, not as individuals, but only as members ... a complex economic organisation.
4. Преобразуйте предложение в
Past
и
Future
Simple
1. It is not a difficult matter to give a simple answer to the basic question.
2. People apply their knowledge and efforts to the gifts of nature in order to satisfy their material wants.
3. Even in the prosperous countries there is an aspect of survival.
4. This problem attracts little attention
5. Such people have the abilities to sustain life without outside assistance.
6. They experience great poverty.
7. They depend on the efforts and cooperation of many thousands of specialist workers.
Материал для обсуждения
1. Ответьте на следующие вопросы
1. What do most introductory books on Economics begin by?
2. What does Economics study?
3. What does it limit itself to?
4. What is an underlying problem of Economics?
5. What categories of people can survive without outside assistance?
6. Why do they Бале a very low standard of living?
7. Why aren't the inhabitants of big cities economically independent?
8. Why is a high standard of living impossible without a cooperation of large numbers of people?
2.
Задайте
вопросы
к
предложениям
1. Precise definitions are usually very complex.
2. Economics limits itself to the study of the material life.
3. The Indian peasants have an extremely tow standard of living.
4. A large percentage of the human race still lives in very small peasant communities.
5. These people experience great poverty.
6. The inhabitants of big cities depend on the efforts of specialized workers.
3. Заполните пропуски, используя глаголы, данные в скобках
1. Although Economics... a vast subject and precise definitions ... usually very complex, it... not a difficult matter to give a simple answer to the basic question (to be).
2. Economics ... itself to the study of the material aspects of life (to limit).
3. We must examine how people have solved or ... to solve this problem (to try).
4. It ... little attention from those of us fortunate enough to live in these areas (to attract).
5. A large percentage of human race still ... in small self-sufficient communities (to live).
4.
Перескажите
текст
«The Individual and Society».
Текст
B
,
C
1.
Прочтите текст
B
и сформулируйте основную мысль каждого абзаца
SCARCITY AND CHOICE
Economics, then, is about the satisfaction of material wants. It is necessary to be quite clear about this; it is people's wants rather than their needs which provide the motive for economic activity. We go to work in order to obtain income which will buy us the things we want rather the things we need. It is not possible to define 'need' in terms of any particular quantity of a commodity, because this would imply that a certain level of consumption is 'right' for an individual. Economists tend to avoid this kind of value judgment which tries to specify how much people ought to consume. It is assumed that individuals wish to enjoy as much well-being as possible, and if their consumption of food, clothing, entertainment, and other goods and services is less than the amount required to give them complete satisfaction they will want to have more of them.
If the resources available to people are insufficient to satisfy all their wants, we say that such resources are scarce. Scarcity is a relative concept; it relates the extent of people's wants to their ability to satisfy those wants. Neither people'swants nor their ability to produce goods and services are constant. Their productive .potential is increasing all the time, but so is their appetite for material things. Whether this increase in the demands for more and better material satisfaction is in the nature of humankind or whether it is artificially stimulated by modern advertising is a subject much disputed at the present time.
Whatever the reason the fact is that we find ourselves in a situation of scarcity. We can not have all the things we want The resources available to satisfy our wants, are, at any time, limited in supply. Our wants, however, appear to be unlimited. Thus, we all are in a position of having to make choices; we can only have more of X by having less of Y. Our incomes are insufficient for us to buy all the things we would like to have. The individual with a limited income and unlimited wants is forced to exercise choice when he or she spends that income. Society as a whole faces a similar problem.
There is a limit to a country's productive capacity because the available supply of land, factories, machines, labour and other economic resources is limited. These economic resources have alternative uses; they can be used to produce many different kinds of goods and services. If some of these resources are committed to the production of one thing society mast forego the outputs of the other things which it might have produced. For example, if we commit resources to the building of houses then the real cost of these houses is the potential output of schools, shops, office blocks or theatres which has been sacrified in order to produce houses
2. Прочтите текст С и раскройте содержание каждой из трех рассматриваемых в нем проблем
THREE BASIC PROBLEMS
People have limited means to satisfy unlimited wants so they are forced to choose. The problems of choice essentially problems of allocation. People must decide how to allocate resources to different uses and then how to allocate the goods and services produced to the individual members of society. There are three fundamental choices to be made:
1. Which goods shall be produced and in what quantities? This problem concerns the composition of total output. The community must decide which goods it is going to produce and hence which goods it is not going to produce. Having decided the range of goods to be produced, the community must then decide how much of each good should be produced. In reality the choices before a community are rarely of 'all or nothing' variety. They usually take the form: more of one thing and less of another. The first and major function of any economic system is to determine in some way the actual quantities and varieties of goods and services which will best meet the wants of its citizens.
2. How should the various goods and services be produced? Most goods can be produced by a variety of methods. Wheat can be grown by making use of much labour and little capital, or by using vast amounts of capital and very little labour. Electrical appliances can be made by using large and complex machines operated by relatively few semi- or unskilled workers. Alternatively they might be produced in hosts of small workshops by highly skilled technicians using relatively little machinery. Different methods of production can be distinguished from one another by the differences in the quantities of resources used in producing them. Economists use the term capita – intensive to describe the alternative methods just outlined. The total output of the community depends not only on the total supply of resources available but on the ways in which these resources are combined together. A community must make decisions on the methods of production to be adopted.
3. How should the goods and services be distributed? This is the third function which an economic system has to perform. The total output has to be shared out among the members of the community. The economic system has to determine the relative sizes of the shares going to each household. Should everyone be given an equal share? Should the output be shared out in accordance with people's ability to pay the price, or should the shares be decided according to tradition and custom? These basic problems are common to all societies no matter what level of economic development they have reached. The methods of solving them will be different from one society to another but the problems are common in all societies.
Материал для обсуждения
1. В парах обсудите одну из предложенных ниже тем
- individual and a society
- scarcity and choice
-three basic problems
2.
Подготовьте
устное
изложение
по
теме
«The Economic Problem».
UNIT 2
MACROECONOMICS AND MICROECONOMICS
Лексический
материал
1.
Выучите
следующие
слова
и выражения
.
total production – общая производительность
total employment – общая занятость
the rate of change of overall prices – коэффициент изменений предельных цен
rate of economic growth - темпы экономического роста
broad aggregates - масштабные совокупности
individual households – индивидуальные хозяйств
layoffs – увольнения
economic activity - экономическая активность
determinant - показатель, определитель
value – ценность
meaningful totals - значимые итоги
gross domestic product (GDP) - валовой внутренний продукт (ВВП)
national income - национальный доход
personal income - личный доход
personal disposable income - личный доход после уплаты налогов
business cycle - экономический цикл
economic growth - экономический рост
attainment – достижения
maintenance - поддержание, содержание
price stability - стабильность цен
eliminate - ликвидировать, исключать
labor shortage - нехватка рабочей силы
reduction - уменьшение
Текст
A
1. Прочтите и переведите текст
WHAT IS MACROECONOMICS?
The word macroeconomics means economics in the large. The macroeconomist's concerns are with such global questions as total production, total employment, the rate of change of overall prices, the rate of economic growth, and so on. The questions asked by the macroeconomist are in terms of broad aggregates – what determines the spending of all consumers as opposed to the microeconomic question of how the spending decisions of individual households are made; what determines the capital spending of all firms combined as opposed to the decision to build a new factory by a single firm; what determines total unemployment in the economy as opposed to why there have been layoffs in a specific industry.
Macroeconomists measure overall economic activity; analyze the determinants of such activity by the use of macroeconomic theory: forecast future economic activity; and attempt to formulate policy responses designed to reconcile forecasts with target values of production, employment, and prices. An important task of macroeconomics is to develop ways of aggregating the values of the economic activities of individuals and firms into meaningful totals. To this end such concepts as gross domestic product (GDP), national income, personal income, and personal disposable income have been developed.
Macroeconomic analysis attempts to explain how the magnitudes of the principal macroeconomic variables are determined and how they interact. And through the development of theories of the business cycle and economic growth, macroeconomics helps to explain the dynamics of how these aggregates move over time.
Macroeconomics is concerned with such major policy issues as the attainment and maintenance of full employment and price stability. Considerable effort must first be expended to determine what goals could be achieved. Experience teaches that it would not be possible to eliminate inflation entirely without inducing a major recession combined with high unemployment. Similarly, an overambitious employment target would produce labor shortages and wage inflation.
During the 1960s it was believed that unemployment could be reduced to 4 percent of the labor force without causing inflation. More recent experience suggests that reduction of unemployment to 5.5 percent of the labor force is about as well as we can do.
Материал
для
обсуждения
1. Answer the following questions for general understanding
l) What does the word macroeconomics mean?
2) What are the concerns of the macroeconomist?
3) What is the difference between the Questions asked by macroeconomists and
microeconomists?
4) What is, according to the text, the important task of macroeconomist?
5) What does macroeconomic analysis attempt to explain?
6) What are the concepts of macroeconomics?
7) What are the most important theories of macroeconomics?
8) What is said about the correlation between the inflation and unemployment?
2. Fill in the table to show the difference between macroeconomics and microeconomics
| Macroeconomics |
Microeconomics |
3. Talk to your partner and decide which of the following statements are true about macroeconomics and macroeconomists
a) Macroeconomics deals with global questions only.
b) Macroeconomics means economics in the large because it asks more questions than microeconomics.
c) Macroeconomist analyzes activities of families and large firms.
d) Such concepts as gross domestic product, national income and personal disposable income serve as meaningful totals.
e) Macroeconomic analysis shows the development of the economic theory.
f) Theory of business cycles concerns business. That is why this is a microeconomic theory.
g) Inflation could not be eliminated without some negative changes in economics.
h) More recent experience proves that macroeconomists of 60s were wrong.
4. Translate into Russian
a) The questions asked by the macroeconomist are in terms of broad aggregates
b) What determines the capital spending of all firms combined as opposed to the decision to build a new factory by a single firm?
c) Macroeconomists measure overall economic activity; analyze the determinants of such activity by the use of macroeconomic theory.
d) Macroeconomic analysis attempts to explain how the magnitudes of the principal macroeconomic variables are determined.
e) Considerable effort must first be expended to determine what goals could be achieved.
f) More recent experience suggests the reduction of unemployment to 5.5 percent of the labor force.
g) Experience teaches that it would not be possible to eliminate inflation entirely.
5. Explain in your own words the importance and practical applications of the following concepts. (Give the Russian equivalents)
a) total production;
b) total employment;
c) the rate of change of overall prices;
d) GDP;
e) national income;
f) personal income;
g) personal disposable income.
6. Think and tell if you are able to answer the following macroeconomic questions (If not, explain why it is impossible)
a) What determines the spending of all consumers?
b) What determines the capital spending?
c) What determines the capital spending of all firms?
7. Discuss the following questions
l) Was there such a difference between macroeconomics and microeconomics in the Soviet economics? In 18th century? In 19th
century?
2) What is more important for economy in general- microeconomics or macroeconomics?
3) Is there a difference in analyzing macroeconomic and microeconomic problems?
Лексический материал (вторая часть)
1. Выучите следующие слова и выражения
monetary policy – финансовая политика
fiscal policy – налоговая (фискальная) полтика
the Board of Governors of the Federal Reserve System – совет директоров
Федеральной резервной системы
supply of money – предложение денег
to stem from – происходить от
to purchase – покупать
government securities – государственные ценные бумаги
to transmit – передавать
to lend – одалживать
cost of borrowing – издержки займа
to be empowered – быть уполномоченным
interest rate (the rediscount rate) – процентная ставка
to reduce – уменьшать
to enable – способствовать, давать возможность
set of policies – пакет установок, законов
vehicle – средство
tax code – налоговый кодекс
to legislate – издавать законы
huge – огромный, громадный
tax cuts – урезание налогов
to bemoan – оплакивать
virtual – фактический, виртуальный
to imply – подразумевать, намекать
to engage – привлекать, вовлекать
bond – обязательство, облигация
to decline – падать, уменьшаться
to prevent – предотвращать
Текст
B
1.
Прочтите
и
переведите
текст
TOOLS OF MACROECONOMIC POLICY (USA)
The principal tools of macroeconomic policy are monetary policy and fiscal policy. Monetary policy in the United States is under the control of the Board of Governors of the Federal Reserve System. The Federal Reserve controls the supply of money and credit in a number of ways. The most important Federal Reserve instrument stems from its authority to purchase and sell government securities in the so-called open market. Credit tightening, for example, may be accomplished by an open-market sale. The purchasers of the government securities transmit money balances to the Federal Reserve, thereby reducing the nation's money supply. This, in turn, reduces bank lending power and drives up the cost of borrowing. The hoped-for outcome is less borrowing and spending by the private sector of the economy. The Federal Reserve is also empowered to lend funds to its member banks. It may raise or lower the interest rate (the rediscount rate) at which it lends the funds, thereby discouraging or encouraging bank borrowing.
The other principal tool of macroeconomic policy is fiscal policy. This means the use of the federal budget to add or subtract purchasing power from the economy. To stimulate the economy, government expenditures may he raised directly or taxes may be reduced, thereby enabling individuals and firms to increase their spending. The opposite set of policies could be employed if aggregate demand is excessive, because higher taxes and less government spending would reduce total spending and help slow inflation.
The principal vehicle of fiscal policy is the federal budget. The annual budget plan is developed by the administration and submitted for review by the congressional budget committees. Changes in the tax code must be legislated by the Congress, and the tax system is administered by the Internal Revenue Service under the general supervision of the Secretary of the Treasury.
Beginning in 1983, the economy experienced mammoth budget deficits that, in five of the next eight years, exceeded $200 billion. These huge deficits make it very difficult to use fiscal policy as a tool of economic stabilization in as much as tax cuts to stimulate the economy would further add to the size of the deficit. Some macro-economists bemoan the virtual loss of fiscal policy as a stabilization tool, and others, usually described as monetarists, welcome it because they have never believed in the efficiency of fiscal policy as a stabilization tool. A third group believes that the policies in order to be effective, should be carefully coordinated. For example, during a recession it would be appropriate to reduce taxes. However, this implies that the Treasury must engage in added borrowing. As a result, bond prices will decline and interest rates will rise, thereby discouraging private borrowing and expenditure. If the tax cut were accompanied by open-market purchases by the Federal Reserve, this expansionary monetary policy could prevent the rise in interest rates.
Материал
для
обсуждения
1. Answer the following questions for general understanding
1) What are the two principal tools of macroeconomic policy in the United States?
2) What is the basic role of the Board of Governors of the Federal Reserve System?
3) What is the role The Federal Reserve in the economy of the United States?
4) What is an example of the Federal reserve's operations? What «instrument» does it use?
5) What is a fiscal policy? What «vehicle» does it use?
6) Explain the conflict between the three group of economists?
7) What, according to the author, would happen if the takes were reduced?
2. Talk to your partner and decide which of the following statements are true
a) Monetary policy in the United States is under control of monetarists.
b) The Federal Reserve's control function is that it can buy and sell bonds in the open market.
c) Purchasers of the government securities are under control of Board of Governors.
d) By lending funds to it's member banks, Federal Reserve discourages encourages bank borrowing.
e) Government raises taxes to stimulate the Secretary of Budget and Internal Revenue Service.
f) US economy had a large budget deficit beginning from year 1983.
g) The group of macroeconomists called «mammoths» borrowed $200 to prevent the rise in interest rates.
3. Explain what is the role of the following agents in the market economy
а) Board of Governors;
b) Federal Reserve System;
с) Congress;
d) member banks;
e) federal budget;
f) Internal Revenue Service
g) Secretary of the Treasury;
h) congressional budget committees.
Are there such institutions in the economic system of the Russian Federation?
Find the equivalents in Russian and explain the difference in their functions?
4. Translate into Russian
a) The Federal Reserve controls the supply of money and credit in a number of ways.
b) The purchasers of the government securities transmit money balances to the Federal Reserve, thereby reducing the nation's money supply.
с) It (Federal Reserve) may raise or lower the interest rate (the rediscount rate) at which it lends the funds, thereby discouraging or encouraging bank borrowing.
d) To enable individuals and firms increase their spending government expenditures may he raised directly or taxes may be reduced.
e) The tax system is administered by the Internal Revenue Service under the general supervision of the Secretary of the Treasury.
f) The huge deficits make it very difficult to use fiscal policy as a tool of economic stabilization.
5. Find antonyms. Write one sentence with each word to illustrate the difference
a) to borrow – ...
b) subtract – ...
c) purchase – ...
d) raise – ...
e) discourage – ...
f) deficit – ...
g) efficiency – ...
6. Explain the difference in meaning between the following words
to reduce – to induce – to produce
power – authority – government
big – large – great – huge – enourmous
7. Finding the roots
a) Find the equivalents in Russian then look up the correct translation of each word. Has the meaning changed?
1) recession; 2) to engage; 3) entrepreneur; 4) business; 5) virtual; 6) tax; 7) code; 8) governor.
What other borrowed terms in economics (other fields) do you know?
Write one sentence with each word. Try to come up with an interesting and understandable story.
8. Discuss the following questions
l) Do you agree that there are only two principle tools of macroeconomic policy? What other «tools» of macroeconomic policy do you know? (Please be very specific).
2) What is the major difference between the American tools of macroeconomics and the ones of Russian government?
3) Why do you think economists don't succeed in regulating the economy of Russia?
Лексический материал (третья часть)
1. Выучите следующие слова и выражения
behavior – поведение
to investigate – исследовать
applied economics. – прикладная экономика
distinction – отличные
subject – предмет, субъект
matter – вопрос, материал
to blur – затуманивать, размывать
to remain – оставаться
exchange ratios – ставка (соотношение) обмена
optimization – оптимизация
utility – полезность
satisfaction – удовлетворение
constraints – ограничение, стеснение
opportunity cost – альтернативные издержки
to sacrifice – пожертвовать, приносить в жертву
to undertake – взять на себя
utility function – функция полезности
to allow – позволять, разрешать
to influence – влиять
to maximize – максимально увеличивать
revenue – доходы
Текст
C
1. Прочтите и переведите текст
MICROECONOMICS
The word «micro» means small, and microeconomics means economics in the small. The optimizing behavior of individual units such as households and firms provides the foundation for microeconomics.
Microeconomists may investigate individual markets or even the economy as a whole, but their analyses are derived from the aggregation of the behavior of individual units. Microeconomic theory is used extensively in many areas of applied economics. For example, it is used in industrial organization, labor economics, international trade, cost-benefit analysis, and many other economic subfields. The tools and analyses of microeconomics provide a common ground, and even a language, for economists interested in a wide range of problems.
At one time there was a sharp distinction in both methodology and subject matter between microeconomics and macroeconomics.
The methodological distinction became somewhat blurred during the 1970s as more and more macroeconomic analyses were built upon microeconomic foundations. Nonetheless, major distinctions remain between the two major branches of economics. For example, the microeconomist is interested in the determination of individual prices and relative prices (i.e., exchange ratios between goods), whereas the macroeconomist is interested more in the general price level and its change over time.
Optimization plays a key role in microeconomics. The consumer is assumed to maximize utility or satisfaction subject to the constraints imposed by income or income earning power. The producer is assumed to maximize profit or minimize cost subject to the technological constraints under which the firm operates. Optimization of social welfare sometimes is the criterion for the determination of public policy.
Opportunity cost is an important concept in microeconomics. Many courses of action are valued in terms of what is sacrificed so that they might be undertaken. For example, the opportunity cost of a public project is the value of the additional goods that the private sector would have produced with the resources used for the public project.
Theory of the Consumer
The individual consumer or household is assumed to possess a utility function which specifies the satisfaction which is gained from the consumption of alternative bundles of goods. The consumer's income or income-earning power determines which bundles are available to the consumer. The consumer then selects a bundle that gives the highest possible level of utility. With few exceptions, the consumer is treated as a price taker – that is, the consumer is free to choose whatever quantities income allows but has no influence over prevailing market prices. In order to maximize utility the consumer purchases goods so that the subjective rate of substitution for each pair of goods as indicated by the consumer's utility function equals the objective rate of substitution given by the ratio of their market prices. This basic utility-maximization analysis has been modified and expanded in many different ways.
Theory of the Producer
The individual producer or firm is assumed to possess a production function, which specifies the quantity of-output produced as a function of the quantities of the inputs used in production. The producer's revenue equals the quantity of output produced and sold times its price, and the cost to the producer equals the sum of the quantities of inputs purchased and used times their prices. Profit is the difference between revenue and cost. The producer is assumed to maximize profits subject to the technology given by the production function. Profit maximization requires that the producer use each factor to a point at which its marginal contribution to revenue equals its marginal contribution to cost.
Under pure competition, the producer is a price taker who may sell at the going market price whatever has been produced. Under monopoly (one seller) the producer recognizes that price declines as sales are expanded, and under monopsony (one buyer) the producer recognizes that the price paid for an input increases as purchases are increased.
A producer's cost function gives production cost as a function of output level on the assumption that the producer combines inputs to minimize production cost. Profit maximization using revenue and cost functions requires that the producer equate the decrement in revenue from producing one less unit (called marginal revenue) to the corresponding decrement in cost (called marginal cost). Under pure competition, marginal revenue equals price. Consequently, the producer equates marginal cost of production to the going market price.
Материал
для
обсуждения
1. Answer the following questions for general understanding
l) What is, according to the text, microeconomics?
2) What is meant by «economics in the small»?
3) What economic phenomena are of microeconomists' attention?
4) Where is microeconomic theory used?
5) What is «optimization»?
6) What is the concept of the theory of consumer?
7) What is the major difference between the theory of consumer and the theory of producer?
2.
Find equivalents in Russian
a) optimizing behavior of individual units;
b) industrial organization;
c) labor economics;
d) international trade;
e) cost-benefit analysis;
f) sharp distinction in both methodology and subject matter;
g) subjective rate of substitution.
3. Translate into Russian
a) Microeconomic theory is used extensively in many areas of applied economics.
в) Their analyses are derived from the aggregation of the behavior of individual units.
с) The consumer then selects a bundle that gives the highest possible level of utility.
d) The consumer is free to choose whatever quantities income allows but has no influence over prevailing market prices.
e) The producer equates marginal cost of production to the going market price.
f) The producer recognizes that price declines as sales are expanded.
g) Under pure competition, the producer is a price taker who may sell at the going market price whatever has been produced.
4. Give definition to the following
а) Microeconomics
b) applied economics
c) optimization
d) opportunity action
e) utility maximization
5. Discuss the following questions
l) What areas of applied economics are of the most importance?
2) What distinction in methodology between macro- and microeconomics is the most distinctive?
3) Does the author's concept of theories of consumer and producer comply with your own?
6. Подготовьте устное изложение по теме «
Macro
-
and
Microeconomics
»
UNIT 3
DEMAND AND SUPPLY
Лексический
материал
(part 1)
1. Выучите следующие слова
in the former – в прошлом
implicit – подразумевающийся
to hold the approach – придерживаться взглядов
approach – подход
provisionally – временно
list – список, перечень
vertical – вертикальный
horizontal – горизонтальный
demand curve – кривая спроса
to slope down – спускаться
downward – направленный вниз
to signify – означать, выражать.
2. Find equivalents in Russian
1. key concept;
2. consumption;
3. imperial foundation;
4. curiosa of theorists;
5. of a commodity at higher prices;
6. strong demand;
7. quantities of a goods;
8. ordinal characteristics;
9. conspicuous consumption.
Текст
A
1. Прочтите и переведите текст
THE
LAW
OF
DEMAND
Demand is a key concept in both macroeconomics and microeconomics. In the former, consumption is mainly a function of income; whereas in the latter, consumption or demand is primarily, but not exclusively, a function of price. This analysis of demand relates to microeconomic theory.
The theory of demand was mostly implicit in the writings of classical economists before the late nineteenth century. Current theory rests on the foundations laid by Marshall (1890), Edgeworth (1881), and Pareto (1896). Marshall viewed demand in a cardinal context, in which utility could be quantified. Most contemporary economists hold the approach taken by Edgeworth and Pareto, in which demand has only ordinal characteristics and in which indifference or preferences become central to the analysis.
Much economic analysis focuses on the relation between prices and quantities demanded, the other variables being provisionally held constant. At the various prices that could prevail in a market during some period of time, different quantities of a good or service would be bought. Demand, then, is considered as a list of prices and quantities, with one quantity for each possible price. With price on the vertical axis and quantity on the horizontal axis, the demand curve slopes downward from left to right, signifying that smaller quantities are bought at higher prices and larger quantities are bought at lower prices. The inverse relation between price and quantity is usually called the law of demand. The law rests on two foundations. One is the theory of the consumer, the logic of which shows that the consumer responds to lower prices by buying more. The other foundation is empirical, with innumerable studies of demand in actual markets having demonstrated the existence of downward-sloping demand curves.
Exceptions to the law of demand are the curiosa of theorists. The best-known exception is the Giffen effect – a consumer buys more, not less, of a commodity at higher prices when a negative income effect dominates over the substitution effect.
Another is the Veblen effect – some commodities are theoretically wanted solely for their higher prices. The higher these prices are, the more the use of such commodities fulfills the requirements of conspicuous consumption, and thus the stronger the demand for them.
Материал
для
обсуждения
1. Answer the following questions for general understanding
l) What is «demand»?
2) What is the current theory of demand based on?
3) What prominent economists contributed to the development of the theory of demand?
4) How is it possible to show the interrelation of price and quantities consumed?
5) What is «Giffen effect»?
6) What is Veblen effect?
2. Complete the table
| PERSONALITY |
YEAR |
IDEAS |
3. Which is not true about the law of demand
a) Consumption is the key concept of microeconomics.
b) Classical economists contributed a lot to the development of the theory of demand.
4. Translate into Russian
a) Much economic analysis focuses on the relation between prices and quantities demanded.
b) Marshall viewed demand in a cardinal context, in which utility could be quantified.
c) Consumption or demand is primarily, but not exclusively, a function of price.
d) With price on the vertical axis and quantity on the horizontal axis, the demand curve slopes downward from left to right.
e) A consumer buys more, not less, of a commodity at higher prices when a negative income effect dominates over the substitution effect.
f) Innumerable studies of demand in actual markets having demonstrated the existence of downward-sloping demand curves.
5. Explain the difference and write one sentence with each
a) sign – signify;
b) list – page;
c) quantity – quality;
d) effect – effective;
e) substitute – restitute;
f) conspicious – curious.
6. Find antonyms to the following
a) negative –
b) possible –
c) numerable –
d) vertical –
7. Think of examples of exceptions to the law of Demand in the contemporary
Russia. Write an essay of 100-150 words.
8. Discuss the following questions
l) Do you agree that «conspicious consumption» lays the great role in the economy of Russia?
2) Do you think that the economic crisis and instants and immediate raise of prices in September 1998 in Russia was provoked by a) reducers; b) consumers; c) wholesalers; d) traders?
3) Do you think it is logical that «consumer esponds to lower prices by buying more»? Think of an example when consumer believes that prices would go even lower and doesn't react immediately in the expected way.
Лексический материал (part 2)
1. Выучите следующие слова
array – массив, множество
shift – движение, сдвиг, перемена
entire – целый
to augment – увеличивать
volume – объем, количество
to substitute – заменять
substitute – заменитель
complement – дополнитель
inferior goods – низшие блага, товары низкого качества
amount – количество
inflationary – инфляционный
to affect – влиять
storable commodities – товары длительного хранения
self-fulfilling – самовыполняющийся
to fluctuate – колебаться
stock demand – биржевой спрос
flow demand – текущий спрос
2. Find equivalents in Russian and write two sentences with each
a) array of prices;
b) increase in demand;
c) a fall in the prices of complements;
d) price expectation;
e) current demand;
f) replacement demand;
g) flow demand.
Текст B
1. Прочитайте и переведите текст
CHANGES IN CONSUMER DEMAND
Increases or decreases in demand are changes in the quantities that would be bought at any of the possible array of prices. Changes in demand are shifts or movements of the entire demand curve. A shift to the right means an increase in demand. It can come from any one or a combination of the following: a change in consumer desire or taste, sometimes augmented by volumes of advertising; a rise in consumers income; a rise in the prices of substitutes; or a fall in the prices of complements. Of course, opposite changes in these factors cause a decrease in demand, i.e. a leftward shift of the entire demand curve. An exception here applies to inferior goods, which are defined as those goods and services bought in smaller amounts as consumer incomes rise.
In an uncertain economy, especially an inflationary one, price expectation can affect demand. For storable commodities, when consumers believe that expected future prices will be higher, buyers tend to increase their current demand and thus tend to make their expectations self-fulfilling.
The demands for durable goods can fluctuate widely over time, as consumers' incomes vary. A durable good has both a stock demand and a flow demand. The stock demand is for the amount that consumers want to hold over a period of years. The flow demand in a given year consists of replacement demand, i.e., for purchases to maintain the stock at some level, and of expansion demand, i.e., for purchases to increase the stock.
Материал для обсуждения
1. Answer the following questions for general understanding
l) What are increases or decreases in demand?
2) What does the shift to the right of the demand curve mean?
3) What are possible causes of the process?
4) What does the shift to the left of the demand curve mean?
5) Are there exceptions to the general rule?
6) How does price expectation affect demand?
7) What is said about demand fluctuations?
2. Translate into Russian
1) Changes in demand are shifts or movements of the entire demand curve.
2) Inferior goods are those goods and services bought in smaller amounts as consumer incomes rise.
3) In an uncertain economy, especially an inflationary one, price expectation can affect demand.
4) The stock demand is for the amount that consumers want to hold over a period of years.
3. Explain the difference between the following words. Write one sentence with each to illustrate the lexical meaning
a) able – willing;
b) to occur – to happen;
c) affect – effect;
d) dependent – interdependent;
e) exceed – precede.
4. The following table shows how words are formed around the verb to produce
| e |
r |
||
| produc |
|||
| t |
iv(e) |
ity |
|
| ion |
5. Fill the gaps with the words
a) The publishing house's new is a color daily newspaper.
b) The plant a new model of car every spring.
c) The of this worker has gone down over the last 5 years.
d) 486 computer is not as Pentium III.
e) The of computers make huge investments in their industries.
f) The Board of Governours of State of New York has come to a decision to decrease the of cheap products.
6. Explain the difference and write one sentence with each
a) affect – effect;
b) relate – relative – relations.
7. Discuss the following question
1) What products could be referred to as inferior?
2) Do you think that the tern inferior goods could be applied to the products of some countries, i.e. China, Turkey, e.t.c
3) Do you think that it has become traditional in Russia to have a stock of such storable commodities as salt, sugar, soap and matches?
Лексический материал (part 3)
1. Выучите следующие слова
aggregate supply – совокупное предложение
complex – сложный, комплексный
forthcoming – предстоящий, ожидаемый
opportunity costs – альтернативные издержки
accountant – бухгалтер
explicit – явный, откровенный
implicit – подразумевающийся
to calculate – подсчитывать, вычислять, рассчитывать
to for(e)go – поступаться
to convert – обращать, преобразовывать
shape – форма
given moment – данный момент
sufficiently – достаточно, в достаточной мере
to permit – позволять, разрешать
variable – переменный, изменчивый;
variable – переменная
rightward movement – движение вправо
conversely – наоборот
bountiful crops – обильный урожай
Текст C
1. Прочитайте и переведите текст
LAW OF SUPPLY
Supply is a fundamental concept in both macro-and microeconomic analysis. In macroeconomic theory, aggregate supply is mainly a function of expected sales to consumers, businesses, and governments. In micro analysis supply is mainly a function of prices and costs of production. A more complex view of the supply curve for a commodity is its relation between quantities forthcoming and the possible current prices of that commodity, its expected future prices, the prices of alternative goods and services, the costs of the producer, and time.
Opportunity Costs
Incorporated in the supply curve of goods and services are opportunity costs. Economists differ from accountants and from the Internal Revenue Service by including both explicit and implicit costs, or opportunity costs. Implicit costs are mainly business costs for wages, rents, and interest, whereas opportunity costs are the alternative costs of doing something else. A sole proprietor or the owners of businesses should calculate what they forgo in wages, rents, and interest by not working for someone else, or by renting the property they use to others, or by the possibility of converting plant and equipment to alternative investment projects.
The Shape and Position of Supply Curves
In competitive markets the shape, or elasticity of supply, reflects time in the production process, such as the immediate or market period, the short run, and the long run. Elasticity of supply is the relative change in price that induces a relative change in quantity supplied. The supply curve is a line on a diagram where the vertical axis measures price and the horizontal axis is quantity. Usually the coefficient of elasticity is positive, meaning that a rise in price induces an increase in the quantity supplied. In the immediate or market period, a given moment, time is defined as too short to allow for a change in output. The supply curve is vertical, and the coefficient of elasticity is zero.
The short run is defined as a period sufficiently long to permit the producer to increase variable inputs, usually labor and materials, but not long enough to permit changes in plant and equipment. The supply curve in the short run is less inelastic or more elastic than in the immediate period. The long run permits sufficient time for the-producer to increase plant and equipment. The longer the time, the greater the elasticity of supply.
Changes in supply are shifts in the position of supply curves. An increase in supply is a rightward movement of a supply curve, with more of the commodity being offered for sale at each possible price. Conversely, a decrease in supply shifts the supply to the left. An increase in supply can occur because sellers expect lower prices in the future, or, as in the agricultural sector, because of bountiful crops. The reverse is true of a decrease in supply. Over periods of time long enough for production processes to change, improvements in technology and changes in input prices and productivities are the main causes of changes in supply.
Материал для обсуждения
1. Answer the following questions for general understanding
l) What is the difference of the concept of supply in macro- and microeconomics? 2) What are opportunity costs?
3) What are implicit costs?
4) What, according to the text, a sole proprietor or the owners should do?
5) What does the elasticity of supply show?
6) What is the difference between the short-time and long-time supply?
7) Why do changes in the supply affect the position of the supply curve?
2. Read each statement given and decide which of the following is not true
1. Supply is a concept of macroeconomics.
2. Economists differ from bookkeepers and tax gatherers because they include also opportunity costs.
3. The shape of the supply curve privedes specialist with the information on elasticity of supply and the reflection of the shareholder.
4. The supply curve is a line on a diagram where the vertical axis measures price and the horizontal axis is quantity.
5. Bountiful crops is a cause of increase in supply.
6. Improvements in technology and changes in input prices and productivities are the main causes of the changes in elastic demand.
3. Find equivalents in Russian
a) fundamental concept;
b) current prices;
c) business costs for wages;
d) sole proprietor;
e) alternative investment projects;
f) coefficient of elasticity;
g) a decrease in supply;
h) improvements in technology.
4. Find antonyms for the following words. Write one sentence with each
a) expected;
b) complex;
с) possible;
d) future;
e) competitive.
5. Find the synonyms of the following
a) accountant;
b) calculate;
c) permit;
d) expect;
e) complex;
f) opportunity;
g) businessman.
6. Define the following terms in English
a) aggregate supply;
b) opportunity costs;
c) sole proprietor;
d) elasticity of supply;
e) coefficient of elasticity.
7. Discuss the following questions
l) How do you understand the sentence:«Economists differ from accountants and from the Internal Revenue Service»?
2) In what sphere can a person with the economic education work?
3) What is a better paid job for economist: applied economics or theoretical research? Give examples to support your opinion.
8. Подготовьте устное изложение по теме «Demand and Supply».
UNIT 4 «Competition, Monopoly and Oligopoly»
Информация 1. Некоторые виды чтения текста
а) Skimming (просмотр с целью найти определенную информацию или понять текст в целом) means reading a text without attention to details in order to get an overview of the organization of the text and its main ideas. This will include attention to title, headings, introduction and conclusion, as well as the beginnings and ends of paragraphs. Skimming the text is an excellent pre- reading habit. When you do a close reading of the text after skimming it, you will find that you read more fluently and accurately.
b) Scanning (вид быстрого чтения с целью понять основную идею и улоаить суть) involves looking quickly through a text to find a specific word or piece of information. There are often times when it is necessary to do this, such as when studying for a test or writing a paper, so it is a useful skill to practice.
c) Intensive reading ( интенсивное чтение ) is reading at a lower speed which may involve reading all or part of the text. The reader pays more attention to details and seeks more through understanding.
d) Extensive reading ( выразительное чтение) is reading in quantity to gain a general understanding of what is read, is intended to develop good reading habits, to enable students to acquire vocabulary and structures and to develop pleasure in reading.
Информация 2. Способы анализа текста
а) Summarizing
Being able to write a summary is an important skill. It shows that you have understood what is most important in a text. A summary is different from a paraphrase. When you paraphrase, you look at a small part of the text and rewrite it in your own words. When you summarize, you look at a whole text and reduce it to a few sentences (still using your own words, not the author's). The first sentence of a summary should express the overall message of the text. The remaining sentences should present the most important ideas in the text. A good summary need not include details or supporting evidence for the main ideas.
b) Précis
The précis is a condensation of the original (usually 1/4 to 1/3 of the length), retaining, for the most part, the author's style, tone, point of view, and, very frequently, his words. What the student eliminates are the illustrations, the detailed explanations, and lengthy speculations.
Important Steps for Précis Writing
1. Read the text; as you read, note the topic dealt with in each paragraph, underline the topic sentence, key words, and important facts as you go along.
2. Analyses how the facts are connected, how the topic of a paragraph is connected with that of a preceding paragraph.
3. Make a list of all the points you are going to mention in your précis. Write them down using the necessary key terms. These notes must contain all the essential facts.
4. You must add no information of your own or your personal judgment.
5. When writing your précis, put aside the original text and work from your notes, putting information into complete sentences in your own words.
c) Abstract
The abstract is in essence the paper in miniature. It presents the purpose of the study, points out major themes, method, results and conclusions. The abstract helps the reader to decide whether the article is interesting or relevant enough to warrant the time necessary to read all the details. The abstract, therefore, must include enough information to fulfill its major function, but it should be brief and concise.
Rules for Writing an Abstract
1. Keep the abstract short. A 200-word limit is recommended.
2. Write it as one paragraph.
3. Do not use abbreviations.
4. Do not include citations or references unless they are essential.
5. Briefly describe the subjects, the structure of the study, the methods, approaches and procedures.
6. Summarize the main results, indicating whether they are significant.
7. Stick mainly to Simple Present tense form.
8. Do not present detailed discussion or explanation.
Информация 3. Прочтите и запомните выражения для аннотирования
Some useful expressions in précis and abstract writing
- давать тщательный -to present a refined analysis
анализ
- изучать проблему - study a problem
- сообщать о последних -cover the latest achievements
достижениях
- дать обзор новейшей литературы -survey the recent literature
- рассматривать точку зрения - treat the opinion
- приводить данные о - introduce data on
- обсуждать взаимосвязь между - to discuss the relationship between
- представить информацию о - provide information on
- давать оценку - assess, estimate, evaluate
- проанализировать характер - examine/analyse the nature and
и истоки чего - либо origins of
1. Find the most suitable Russian equivalents for the following English word-combinations
To present an approach to the analysis; to give a detailed analysis; to provide a satisfactory theoretical foundation; to develop a model of; to offer a historical overview; to address the question of; to provide a unique study of; to be a theoretical investigation of; to present a model of; to construct a variety of; the paper by two eminent economists; to be of interest to scholars and students of economics
Информация 4. Познакомьтесь с образцом аннотации
MONEY AND THE ECONOMY
Issues in Monetary Analysis
Karl Brunner and Allan H. Meltzer Carnegie-MeUon
University
This volume, by two eminent monetarist economists, offers a unique perspective on a key issue of monetary economics: the effect of money on output. Karl Brunner and Allan Meltzer address the theoretical aspects of this issue with the purpose of understanding their policy implications. They offer an historical overview of the relationship between money and output, and then go on to present a model of a monetary economy before examining the real sector. The theme of the final lecture is uncertainty and the costs of acquiring information.
Cliches:
the volume by two eminent monetarist economists;
this volume offers a unique perspective on a key issue of;
the author addresses the theoretical aspects of the issue;
the authors offer a historical overview of;
the authors present a model of ( a monetary economy).
Лексический материал (part 1)
1. Выучите следующие слова
to trade property rights – обменивать права на собственность
competitive equilibrium – равновесие конкуренции
outcome – исход, результат
initial endowments of commodities – первоначальный вклад в
товары
relevant – соответствующий, релевантный
inevitable – неизбежный
respond – ответ
hazard – опасность
quantities of goods offered – объемы (количество)
предлагаемых товаров
to exist – существовать
infinitely elastic – бесконечно эластичный
acquisition – приобретение
to improve – улучшать
hence – следовательно
voluntary exchange – добровольный обмен
to compel – вынуждать
constant – постоянный
to regard as – рассматривать как (в качестве)
tentative – предварительный
unique – уникальный, исключительный
core of a market – основа экономики
Текст А
1. Прочтите и переведите текст
Competition refers to the nature of the conditions under which individuals may trade property rights. It assumes a definition of property rights that individuals may trade among themselves as well as a description of the trading process. A competitive equilibrium is the outcome of competition. The very existence of such an equilibrium depends on the nature of the property rights. These aspects of competition are especially important in connection with the development of new technology and new products and with the use of low-cost, large-scale methods of production and distribution.
The simplest situation in an analysis of competition is a market where individuals have initial endowments of commodities that they own and that they may trade among themselves. All trades occur at the same time and place. The essential characteristics remain valid when trades do not all occur at the same time and place. However, individuals would have incomplete knowledge relevant for their decisions. This complication changes the nature of the outcome of competition. Incomplete knowledge is inevitable partly because the future is unknown. Even so, it is often less costly to take current actions that will have future consequences without knowing that these will be than to respond only to momentary events of the present, the advantages of planning and the resulting exposure to hazards that may occur alter the effects of competition.
These basic considerations help explain the nature of production and why the quantities of goods offered will change over time in response to the expectations and information firms have. They also explain why some common notions about competition are inadequate. Among the inadequate notions about competition is the belief that a necessary condition for competition is a lack of power by any firm to affect the prices of its products. Sometimes this is put in another form, that competition can exist in an industry only if the demand curves facing the individual firms in that industry are infinitely elastic so that changes in the quantities sold by a single firm cannot affect the product price. This condition is not necessary for competition. Nor is it necessary for competition that the number of firms be so large that each one is of negligibly small size relative to the total market for the commodities made by firms in the industry. Finally, it may be consistent with competition that some or all firms in an industry have obtained very high profit rates.
Pure Exchange
Assume there is a market where there are individuals, each of whom starts with given amounts of various commodities. Each one would like to make trades that will result in the acquisition of goods preferred to those goods to be exchanged. The theory assumes that for each trader the purpose of trade is to improve the trader's position. Hence, the trader would not willingly leave the market with a bundle of goods worth less than his or her initial holdings. The theory also assumes that each trader owns the commodities to be traded, that they can be traded on terms that are mutually acceptable to the parties directly involved in an exchange, and that each trader may accept or reject the terms offered. Underlying the possibility of exchange is the existence of property rights in the goods. Competition requires voluntary exchange so that no trader is compelled to accept or reject offers without freely given consent. The very notion of exchange implies, therefore, a voluntary agreement among those who are directly involved in the transaction on the terms that each one willingly accepts.
In pure exchange, although the total quantities of the commodities exchanged among the parties is constant, each one must regard the obtained goods as worth more than the exchanged goods. If the parties can reach agreement on mutually beneficial terms of exchange, the result is an allocation of the commodities among the individuals that must make at least one of them better off than before and cannot make anyone worse off than before.
The theory assumes that no individual accepts terms that would leave that individual in a worse position than if no trades at all were made. The existence of a state of competition in pure exchange allows the participants to seek the best terms that they can obtain from the others. Competition does not requires the presence of a very large number of traders nor does it require that each of the individual traders in the market must be of such a small relative size that none can affect the terms of trade. Traders can make tentative agreements with each other subject to the condition that these agreements become binding only if none can obtain better terms from others. The final outcome is a set of exchanges among the traders such that no individual or group of individuals can obtain better terms. The set of outcomes with these attributes need not be unique. All possible outcomes with these attributes represent the state of competition. The set of all possible trades that can satisfy these conditions is known as the core of a market. Therefore, the set of trades induced by competition in a market is in the core of a market.
Материал для обсуждения
1. Answer the following questions for general understanding
1. What is competition?
2. What is a competitive equilibrium?
3. What is the simpliest situation in an analysis of competition?
4. What, according to the text, are the basic considerations of the competition and
what do they explain?
5. What are the «inadeqate» notions about competition?
6. What does the competition require?
7. What are the features of pure exchange?
2. Read each statement given and decide which of the following is not true
a) Competition refers to both the trade of property rights and the description of the trading process.
b) A competitive equilibrium is the result of cmpetition.
c) Goods are infinetely elastic when the damand for them is elastic.
d) Some or all firms may have high profits under competition.
e) Competition is only possible when people arewilling to exchange commodities.
f) In pure exchange each participant exchanges bad goods for better ones.
g) Core market is the set of all possible trades that can satisfy these conditions.
3. Define the following terms in English
a) competiotion;
b) property rights;
c) competitive equilibrium;
d) infinitely elastic demand curves;
e) pure exchange;
f) individual trader;
g) description.
4. Translate into Russian
a) Competition refers to the nature of the conditions under which individuals may trade property rights.
b) The very existence of such an equilibrium depends on the nature of the property rights.
c) The essential characteristics remain valid when trades do not all occur at the same time and place.
d) The theory assumes that for each trader the purpose of trade is to improve the trader's position.
e) Underlying the possibility of exchange is the existence of property rights in the goods.
f) Traders can make tentative agreements with each other.
5. Discuss the following questions
l) Under what circumstances competition is impossible? 2) Under what circumstances is pure exchange possible? 3) Do you think that competition stimulates the production of better goods? What role does advertising play in competition?
6. Write a summary of the text A
Лексический материал (part 2)
1. Запомните следующие слова и выражения
bilateral monopoly – двусторонняя монополия
degree – степень
aside from – в стороне от
nonprofit – некоммерческий
«natural» monopoly – естественная монополия
efficient – эффективный
precise – точный
to conclude – заключать
entry – вход, вступление
limiting cases – ограничивающие случаи
antithesis – антитезис, противоположность
to establish – учреждать, устанавливать
economic policymakers – стратеги экономики
to impede – затруднять
to grant – выдавать
superior – превосходящий
insurmountable – непреодолимый
domination – преобладание, доминирование
competitive pressures – конкурентное давление
Текст В
1. Прочтите и переведите текст
MONOPOLY
Monopoly is a market structure with only a single seller of a commodity or service dealing with a large number of buyers. When, a single seller faces a single buyer, that situation is known as bilateral monopoly.
The most important features of market structure are those which influence the nature of competition and price determination. The key element in this segment of market organization is the degree of seller concentration, or the number and size distributions of the sellers. There is monopoly when there is only one seller in an industry, and there is competition when there are many sellers in an industry. In cases of an intermediate number of sellers, that is, something between monopoly and competition, there can be two sellers (duopoly), a few sellers (oligopoly), or many sellers (atomistic competition).
Today the term monopoly is usually extended to include any group of firms which act together to fix prices or levels of production. Complete control of all output is not necessary to exercise monopoly power. Any combination of firms which controls at least 80 percent of an industry's production can dictate the prices of the remaining 20 percent Aside from private monopolies, there are public monopolies. One example of a public monopoly in the United States is the nonprofit postal service. There is also the «natural» monopoly, which exists when it is more efficient, technically, to have a single seller.
Although the precise definition of monopoly – a market structure with only a single seller of a commodity or service – cannot he applied directly to a labor union because a union is not a seller of services, labor unions have monopolistic characteristics. For example, when a union concludes a wage settlement which sets wage rates at a level higher than that acceptable to unorganized workers, the union clearly contributes to monopolistic wage results. In effect, the price of labor (wages) is set without regard to the available supply of labor.
Monopolies versus Competition
Pure monopoly is a theoretical market structure where there is only one seller of a commodity or service, where entry into the industry is closed to potential competitors, and where the seller has complete control over the quantity of goods offered for sale and the price at which goods are sold. Pure monopoly is one of two limiting cases used in the analysis of market structure. The other is pure competition, a situation in which there are many sellers who can influence neither the total quantity of a commodity or service offered for sale nor its selling price. Hence, monopoly is the exact antithesis of competition. It is generally agreed that neither of these two limiting cases is to be found among existing market structures.
The monopolist establishes market position by ability to control absolutely the supply of a product or service offered for sale and the related ability to set price. Theoretically profit maximization is the primary objective, and it is often possible to achieve this by restricting output and the quantity of goods offered for sale. Levels of output are held below the quantity that would be produced in a competitive situation. Hence, monopoly is of interest to economic policymakers because it may impede the most efficient possible allocation of a nation's economic resources.
Monopolies held by individuals or organizations may begin by the granting of a patent or a copyright, by the possession of a superior skill or talent, or by the ownership of strategic capital. The huge capital investment necessary to organize a firm in some industries raises an almost insurmountable barrier to entry in these monopolistic fields and, thus, provides established corporations in these industries with potential monopoly power.
The use of such monopoly power may lead to the development of substitute products, to an attempt at entry into monopolistic fields by new firms (if profits are high enough), or to public prosecution or regulation. The antitrust policy of the federal government has prevented the domination of an industry by one firm or even a few firms. Moreover, with the growth of international trade and investment, it is no longer possible to determine whether an effective monopoly exists by studying market shares. The recent competitive pressures from Japanese sellers of autos and electronic products have resulted in more competition and less monopoly power on the part of U.S. manufacturers. Thus, the trend during the last 40 years or so in the United States has been away from monopolies in many industries and toward oligopolies.
Материал для обсуждения
1. Answer the following questions for general understanding
l) What is a monopoly, duopoly, oligopoly, atomistic competition?
2) What is a bilateral monopoly?
3) Is full control necessary for the monopoly?
4) What is an example of a public monopoly?
5) What is a «natural» monopoly?
6) What are the two «limiting cases» used in the analysis of market structures?
7) How do the monopolies begin?
2. Read the statements given and decide which of the following are not false
a) When two buyers meet two sellers it is called bilateral monopoly.
b) The degree of sellers concentration is the number and size distributions of monopolists.
c) Any group of firms which act together to fix prices or levels of production is a monopoly.
d) Monopoly is a 100% different thing than competition
e) Economic policymakers are interested in monopolies on markets.
3. Find equivalents in Russian
a) market structure;
b) segment of market;
c) public monopolies;
d) labor unions;
e) entry into the industry;
f) profit maximization;
g) substitute products;
h) antitrust policy.
4. Translate into Russian
a) Monopoly is a market structure with only a single seller of a commodity or service dealing with a large number of buyers.
b) The key element in this segment of market organization is the degree of seller
concentration.
c) Complete control of all output is not necessary to exercise monopoly power.
d) Pure monopoly is a theoretical market structure where there is only one seller of a commodity or service.
e) Monopoly is the exact antithesis of competition.
f) The use of monopoly power may lead to the development of substitute products.
g) The trend during the last 40 years or so in the United States has been away from monopolies in many industries and toward oligopolies.
5. Give definitions in English to the following
a) monopoly;
b) bilateral monopoly;
c) duopoly;
d)atomistic competition;
e) «natural» monopoly;
f) public monopoly.
6. Discuss the following questions
1) Are there any examples of bilateral monopolies on the: a) world market b) domestic market c) local market.
2) Think of an example of a public monopoly. Is postal service in Russia also a public monopoly as it is in the USA?
3) What are the criteria for defining a monopoly «natural»? Give an example.
Лексический материал (part 3)
1. Запомните следующие слова и выражения
to exist – существовать
to deal with – иметь дело с чем-либо (кем-либо)
bilateral – двусторонний
portion – часть, доля, порция
to be composed of – состоять из
appreciable – значительный
consistent – последовательный
repercussions – последствия
roughly the same – практический такой же
reluctant – неохотный
stable – стабильный
Текст С
1. Прочтите и переведите текст
OLIGOPOLIES
An oligopoly exists when a few sellers of a commodity or service deal with a large number of buyers. When a few sellers face a few buyers, that situation is known as bilateral oligopoly. In the case of oligopoly a small number of companies supply the major portion of an industry's output. In effect the industry is composed of a few large firms which account for a significant share of the total production. Thus, the actions of the individual firms have an appreciable effect on their competitors.
However, it does not follow as a consequence of the presence of relatively few firms in an industry that competition is absent. Although there are few firms in an industry, they may still act independently, and the outcome of their actions is consistent with competition. With few firms in an industry, each takes into account the likely repercussions of its actions. For example, each seller knows that if he or she lowers prices, the few competitors will immediately follow suit and lower their prices, leaving the seller with roughly the same share of the total market but lower profits. However, the seller may be reluctant to raise prices because competitors might not follow this lead.
One feature of markets with few sellers is that prices are often stable, except during periods of very rapid inflation. Also, prices of oligopolistic industries generally fluctuate less widely than in more competitive industries.
Материал для обсуждения
1. Answer the following questions for general understanding
l) When does oligopoly exist?
2) What is bilateral oligopoly?
3) Is absent of competition a common phenomenon?
4) What is known to happen if one competitor lowers the price?
5) What is the feature of the market with few sellers?
2. Translate into Russian
a) When a few sellers face a few buyers, this situation is known as bilateral oligopoly.
b) The actions of the individual firms have an appreciable effect on their competitors.
c) Although there are few firms in an industry, they may still act independently.
d) One feature of markets with few sellers is that prices are often stable.
e) Prices of oligopolistic industries generally fluctuate less widely.
3. Compose sentences using the following expressions
a) to deal with smth.;
b) to face smth.;
с) to be composed of smth.;
d) to be reluctant to smth.;
e) in case of smth.
4. Find equivalents in Russian
a) to act indepependently;
b) to take into account;
c) not to follow this lead;
d) to fluctuate less widely.
5. Discuss the following questions
l) How can policymakers influence the economics via oligopolies?
2) Is price stability a good trend in economy? What about the 60s-70s in the history of the USSR?
3) Why, in your, opinion there are no such institutions as natural and public oligopolies?
6. Write an abstract of text C.
7. Speak about competition, monopolies and oligopolies.
Библиографический список
1. Английский язык для студентов заочной формы обучения (гуманитарные специальности): Учеб. пособие / Л.В. Хведченя, О.И. Васючкова, Т.В. Елисеева и др.- 2-е изд., перераб. и доп.- Мн.: Высш. шк., 1998- 416 с.
2. Английский язык для инженеров: Учеб". / Полякова Т.Ю., Е.В. Синявская, О.И. Тынкова и др.- М.: Высш. шк., 1997- 463 с.
3. Коваленко П.И., Агабекян И.А. Английский для экономистов.- Ростов н/Д: Феникс, 2001-352 с.
4. Португалов В.Д. Учебник по английскому языку. Economics.- М: ООО «Изд-во ACT», 2002.- 303 с.
Редактор Т.А. Жирнова
ИД 06039 от 12.10.2001
Свод, темплан 2005 г.
Подписано в печать 21.02.2005. Формат 60х84'Лб. Бумага офсетная.
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