What is the aim of all business? 

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What is the aim of all business?

2. How can businesses be owned?

3. What societies are called self-sufficient?

4. In what countries don’t businesses exist?

5. Why do business activity combine scarce resources of production?

6. What do the wages allow workers to do?


A. They are the societies where people have their own plot of land and attempt to survive and produce enough for their own needs.

B. To consume products made by other people.

C. In order to produce goods and services.

D. It is to combine the factors of production to make products which will satisfy people’s wants.

E. In undeveloped countries.

F. They can be privately-owned or owned by the state, by one person or by thousands of shareholders.



Ex. 6. Complete the following sentences with the correct prepositions.


1. We are thinking ______ doing the advertisement on television.

2. He insisted _______ using a balance argument the product.

3. If you look _______ the word in the dictionary, it means all communication which is non-


4. Have you heard ________ Professor Stell? He’s very well-known in his field.

5. We’ve looked _______ the question of hiring the professional salespeople. It’s mush too


6. We are looking ________ a message which really appeals ______ the audience. So far we

haven’t found one.






Discuss these questions with your group mates.

1. What is meant by the word “system”? How do you understand it?

2. What systems do you know? Give your examples.

3. To what system do you belong?


Text 1





to determine – определять

efficient – эффективный

to allocate factors of production – размещать факторы производства

to provide answer – давать ответ

available resources – имеющиеся в распоряжении (доступные) ресурсы

to rely upon government – полагаться на правительство

remote areas – отдаленные районы

isolated tribes – изолированные племена

rural area – сельская местность

generation – поколение

the selection of crops – выбор зерновых культур

to sustain – поддерживать

harvest is poor – урожай плохой (бедный)

to survive – выживать

tribal chief – вождь племени

landowner – землевладелец

custom – обычай

remains – остатки

The central problem of economics is to determine the most efficient ways to allocate the factors of production (natural resources, human resources and capital) 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 same three questions:

- What goods and services are to be produced and in what quantities are they to be produced?

- How are those goods and services to be produced?

- Who will receive and consume them?

Societies and nations have created different economic systems to provide answers to these

fundamental questions.

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 population for goods and services. The more goods and services that can be produced from these limited resources the higher the standard of livingof the population.

If we look at the different political and social structures which exist in the world today, and the way in which these systems have developed over the years, we can say that people use a very great varieties of economic systems. In fact, it is possible to group these different economic structures into four broad categories:

  • traditional economy which looks to customs and traditions
  • planned or command economy which rely upon governments to provide the answers
  • market economy in which market prices answer most of What, How and Who questions.
  • mixed economy, which is a mixture of command and market economies.

The traditional economy. The answers to the What, How and Who questions are decided by traditions in these economies. Traditional economy systems are usually found in the more remote areas of the world. Such systems may characterize isolated tribes or groups or even whole economies. Typically, in a traditional economy most of the people live in rural areas and their main activities are agriculture, fishing or hunting. The goods and services in such a system are those that have been produced for many years or even generations in a way they have always been produced. In short, the division of land among the families in the village or tribe, the methods and times of planting and harvesting, the selection of crops, and the way in which the product is distributed among the different groups are all determined by very slowly changing traditions.

The basic economic problems do not arise as problems to be discussed and agued about. They have all been decided long ago. Who gets what is produced in such an economy? Since there is little produced, there is little to be distributed. Most individuals live very poor, they have enough to sustain them but not more than that. In some years, when the harvest is poor, some are not able to survive and either leave the society or die. In better years, when the harvest is high there may be more than enough to survive. When such a surplus exists, it is distributed traditionally. The most part of the product may go to a tribal chief or large landowner, while the remains are distributed according to customs.




Ex. 1. Study the different meaning of the word and use it to translate the sentences.


allocate v 1) распределять, размещать

Выделять, назначать

3) ассигновать, отчислять


Allocation n 1) распределение, размещение

2) ассигнование, отчисление

3) выделение (средств, ресурсов)

4) классификация


1. The money was allocated for various projects.

2. Rooms have been allocated to the delegates.

3. Prices are an indication to the producers how best to allocate productive resources.

4. Families choose to allocate their expected income between consumption and saving.

5. Our committee allocated money for the memorial.

6. You should allocate tasks among members of the group.

7. Out of the total budget, $3000 was allocated to repairs.


Ex. 2. Match the words with their definitions.

____ surplus a) custom, practice of long standing.

____ generation b) the degree to which a person or group of persons and

their families are able to satisfy their wants.

____ tradition c) a quantity or amount in excess of what is required

____ command economy d) all persons born about same time

____ standard of living e) people or race organized as a state

____ nation f) an economy in which business activities and the allocation

of resources are determined by government order


Ex. 3. Give Russian equivalents to the following words and word combinations:


standard of living ___________________________________________________

to use available resources_____________________________________________

societies have created different economic systems _________________________

the problem of scarcity__________________________________________________

isolated tribes ______________________________________________________

when such a surplus exists ____________________________________________

remote areas of the world _____________________________________________

they have enough to sustain themselves ___________________________________

rural areas __________________________________________________________

very slowly changing traditions __________________________________________


Ex. 4. Match the verbs in column A with the nouns in column B.


To allocate a. available resources

2. to solve b. factors of production

3. to provide c. the life

4. to create d. the problem

5. to use e. government

6. to distribute f. answers

7. to sustain g. surplus

8. to rely upon h. economic system

Ex. 5. Word-building. Complete the following table by inserting the missing forms.

Verb Noun Adjective


Ex. 6. Finish the following sentences:


1. Every society must provide……

2. Traditional economies are usually found……

3. In a traditional economy most people live in……

4. The goods and services in such a system are those……

5. Most individuals live……

6. When the harvest is high there may be more……

7. When such a surplus exists……


Ex. 7. Say if these sentences are true or false? Correct the false ones.

1. To provide answers to the three fundamental questions societies and nations have created a single economic system.

2. The standard of living doesn’t depend upon the quantity of goods and services produced in the society.

3. Traditional economy looks to customs and traditions.

4. Traditional economic system can be found in the central parts of a country.

5. The main activities of people living in a traditional economy are mining and trading.

6. Most individuals in a traditional economy live very poor.

7. The most part of the product in this society goes to the poorest people.


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