Exercise 11. Economics Questions test

1. A ______ is the person who directs, supervises and operates a business or a section of a business. This person is in a management position but is not always the owner of the company.

a) worker

b) manager

c) wealthy person

2. In a _____ economy, individuals and businesses own and make most of the decisions about resources. In this type of economy, the people own and control most of the production processes.

a) modest

b) market

c) command

3. In a ______ economy, individuals and governments own and control production together. They both decide how resources will be used, what will be produced and who will buy and use the products.

a) market

b) mixed

c) command

4. A social science concerned with the production, distribution, exchange, and consumption of goods and services is ______.

a) economics

b) economy

c) macroeconomics

5. Price theory or ______, explains how the interplay of supply and demand in competitive markets creates a multitude of individual prices, wage rates, profit margins, and rental changes.

a) macroeconomics

b) microeconomics

c) economics

6. Standard economics can be divided into two major fields. The second field, ______, deals with modern explanations of national income and employment.

a) macroeconomics

b) economics

c) microeconomics

7. Person intended to save money, as by efficient operation is ______.

a) economic

b) economical

c) economist

8. Sum-total of what people do and what they want is called ______.

a) economic system

b) economic activity

c) economy

9. Business activities unregulated by state ownership or control is ______.

a) privatization

b) factory owner

c) private enterprise

10. A plan or course of action, as of a government of business intended to influence and determine decisions, actions and other matters is ______.

a) politics

b) police

c) policy

11. One of the more or less internally autonomous territorial and political units composing a federation under a sovereign government is ______.

a) nation

b) state

c) economy

12. The measurable, countable, or comparable property or aspect of a thing is ______.

a) quantity

b) quality

c) characteristic

 

 

PART 2

UNIT 8 Utility and Prices

Text A

Our basic needs are simple, but our additional individual wants are often very complex. Commodities of different kinds satisfy our wants in different ways. A banana, a bottle of medicine and a textbook satisfy very different wants. The banana cannot satisfy the same wants as the textbook.

This characteristic of satisfying a want is known in economics as its `utility'. Utility, however, should not be confused with usefulness. For example, a submarine may or may not be useful in time of peace, but it satisfies a want. Many nations want submarines. Economists say that utility determines 'the relationship between a consumer and a commodity'.

Utility varies between different people and between different nations. A vegetarian does not want meat, but may rate the utility of bananas very highly, while a meat-eater may prefer steak. A mountain-republic like Switzerland has little interest in submarines, while maritime nations rate them highly.

Utility varies not only in relation to individual tastes and to geography, but also in relation to time. In wartime, the utility of bombs is high, and the utility of pianos is low. Utility is therefore related to our decisions about priorities in production – particularly in a centrally-planned economy. The production of pianos falls sharply in wartime.

The utility of a commodity is also related to the quantity which is available to the consumer. If paper is freely available, people will not be so interested in buying too much of it. If there is an excess of paper, the relative demand for paper will go down. We say that the utility of a commodity therefore decreases as the consumer's stock of that commodity increases.

 

 

Exercise 1. Answer these questions, basing your answers on the text.

 

a. What is the difference between our basic needs and our additional wants?

b. What two ways are there of describing `utility’?

c. What example is used to show that utility varies from person to person?

d. What example is used to show that it varies from nation to nation?

e. What example is used to show that it varies from time to time?

f. What example is used to show that utility is related to quantity?

g. What can we say about the way in which utility decreases?

 

 

Exercise 2. Say whether these statements are true or false, and if they are false say why.

 

a. Our basic needs are complex.

b. Our wants are satisfied in much the same way by all commodities.

c. Usefulness should not be confused with utility.

d. Vegetarians rate the utility of meat very highly.

e. The Swiss nation is not particularly interested in submarines.

f. In wartime the utility of pianos is high.

g. In a centrally-planned economy, decisions about priorities are related to utility.

h. The demand for paper goes down if the quantity of paper increases.

 

 

Exercise 3. Contrast these pairs of sentences, using 'while'.

 

EXAMPLE: Switzerland has little interest in submarines. Maritime nations rate them highly.

i. Switzerland has little interest in submarines, while maritime nations rate them highly.

ii. Switzerland on the one hand has little interest in submarines, while maritime nations on the other (hand) rate them highly.

a. In peacetime bombs are not in very great demand. In wartime their utility is very high.

b. Bananas may satisfy one kind of want. Textbooks satisfy an entirely different need.

c. Meat-eaters may enjoy both beef and bananas. Vegetarians value only the bananas.

d. A product's utility may be very high in a certain part of the world. In a different part of the world its utility may be very low.

e. Some people may prefer to save their money and invest it in a secure and profitable scheme. Some may prefer to buy a particular commodity which they have wanted for a long time.

 

 

Exercise 4. Change these sentences in order to use 'should' with 'not'. This changes the statements into recommendations.

 

EXAMPLE: Utility is not to be confused with usefulness.

Utility should not be confused with usefulness.

a. The economic system is not to be studied in an unscientific way.

b. a communist government is not to be expected to concern itself with private profits.

c. The government of a capitalistic country is not to be expected to concern itself with detailed central planning.

d. A capitalistic system is not to be regarded as completely free of central planning.

e. These factors are not to be considered the most important in helping us to improve the quality of the service.

 

 

Exercise 5. Find single words in the text for which these words could be substituted.

 

a extra (1-2) d likes and dislikes (12-14) g amount (17-19)

b quality (5-7) e preferences (14-16) h goes down (18-22)

c coastal (9-13) f rapidly (15-17)

Text B

In most economic systems, the prices of the majority of goods and services do not change over short periods of time. In some systems it is of course possible for an individual to bargain over prices, because they are not fixed in advance. In general terms, however, the individual cannot change the prices of the commodities he wants. When planning his expenditure, he must therefore accept these fixed prices. He must also pay this same fixed price no matter how many units he buys. A consumer will go on buying bananas for as long as he continues to be satisfied. If he buys more, he shows that his satisfaction is still greater than his dislike of losing money. With each successive purchase, however, his satisfaction compensates less for the loss of money.

A point in time comes when the financial sacrifice is greater than the satisfaction of eating bananas. The consumer will therefore stop buying bananas at the current price. The bananas are unchanged; they are no better or worse than before. Their marginal utility to the consumer has, however, changed. If the price had been higher, he might have bought fewer bananas; if the price had been lower, he might have bought more.

It is clear from this argument that the nature of a commodity remains the same, but its utility changes. This change indicates that a special relationship exists between goods and services on the one hand, and a consumer and his money on the other hand. The consumer's desire for a commodity tends to diminish as he buys more units of that commodity. Economists call this tendency the Law of Diminishing Marginal Utility.

Exercise 1. Answer these questions, basing your answers on the text.

 

a. Prices are fixed in most economic systems, but what is possible in some systems?

b. What is the individual generally unable to change?

c. Under what conditions will a consumer go on buying a commodity?

d. What does the consumer show by buying more bananas?

e. What happens with each successive purchase?

f. At what point will the consumer stop buying the commodity at the current price?

g. What remains unchanged with each purchase?

h. What has changed when this point is reached?

i. Under what conditions might he have bought more?

j. What does a consumer's desire tend to do?

Exercise 2. Say whether these statements are true or false, and if they are false say why.

 

a. In the majority of systems prices are fixed but in the minority it is possible to bargain.

b. It is generally possible for the individual to change the prices of the commodities he wants.

c. We know that a consumer's satisfaction is greater than his financial sacrifice if he goes on buying a commodity at the current price.

d. When a consumer becomes dissatisfied at paying the current price, he pays less.

e. The financial sacrifice becomes too great when the quality of the commodity gets worse.

f. The consumer will probably buy more if the price falls.

g. If the price rises, the consumer will probably buy less.

h. If the price remains the same, the consumer will reach a point when his sacrifice is greater than his satisfaction.

i. The utility of a product stays the same, but its nature changes.

j. The Law of Diminishing Marginal Utility is the name which economists give to the tendency for a consumer's desire to diminish as he buys more units.

 

 

Exercise 3. Make these sentences passive, omitting the agent phrase.

 

a. The government fixes the prices.

b. They fix the prices in advance.

c. He must pay the current price.

d. The commodity satisfies the consumer.

e. The government has changed the policy.

f. They have produced additional supplies for the men.

g. They have obtained various valuable minerals in that area.

h. Economists have classified the various economic systems.

i. Even in a dedicated capitalist economy the government plans certain things.

j. The committee prepared a special scheme.

 

 

Exercise 4. Change these sentences as in the example. The meaning does not change.

 

EXAMPLE: When he plans his expenditure, a consumer must accept fixed prices.

When planning his expenditure, a consumer must accept fixed prices.

a. When it prepares a new product, a company must spend a large amount of money.

b. When it decides production targets for a period of years, a government must establish its priorities very clearly.

c. When it makes a decision over the number of employees which will be needed, the management of a factory must consider everything very carefully.

d. When it tries to increase efficiency in production, a planning body should decide what factors are most important.

e. When they consider problems of distribution, businessmen should investigate all the methods currently in use and decide objectivity whether they can be improved.

 

Exercise 5. Change the listed words and phrases into agent nouns.

 

EXAMPLE: consume = consum + er = consumer

plan = plan + er = planner

 

a buy e bank i manage

b sell f mine j begin

c use g produce k breed

d work h organize l perform

 

m a man who breeds cattle p a man who produces whisky

n a man who owns a house q a man who manages a bank

o a man who pays tax

 

 

Supplement

Study this diagram about kinds of production and then answer the questions.

 

PRODUCTION

primary industries secondary industries tertiary industries

intermediate final

hunting engineering banking teaching

fishing building trading medicine

farming gas, electricity insurance defence

mining weaving transport acting

etc. etc. etc. etc.

 

a. What three types of production are there?

b. If primary relates to 'one', and secondary relates to 'two', what does tertiary relate to?

c. What two types of tertiary industry are there?

d. What type does farming belong to?

e. What types do these belong to: trading; teaching; building?

f. Which of these categories describes secondary industries? - (1) selling things; (2) making things; (3) growing things.

g. Which of these categories relates to both primary and secondary industries? - (1) providing goods; (2) providing services.

h. Which of these categories relates to the three activities of mining, engineering and building? - (1) heavy industries; (2) light industries.

 

Essential Vocabulary

1. utility корисність

2. usefulness застосовність; придатність

3. rate оцінювати

4. maritime приморський

5. demand попит

6. bargain торгуватися

7. expenditure витрата, витрачання

8. successive наступний, послідовний

9. argument доказ, аргументація

10. The Law of Diminishing Marginal Utility Закон спадної граничної корисності

 

 

UNIT 9 Supply and Demand

Text A

Bananas are a typical example of perishable goods. By ‘perishable’ we mean goods which cannot be stored for any length of time without going bad. Most foodstuffs are in the perishable category. Such goods are offered for sale as quickly as possible; and so the supply of perishables and the stock of perishables available at any time are usually the same in quantity.

This is not true in the case of non-perishable goods like coal, steel and cars, which do not deteriorate easily. The supply of cars on the market may not be the same as the actual stock of cars in the factories. Economists talk about the Law of Supply, in which a rise in prices tends to increase supply, while a fall in prices tends to reduce it. If prices rise for a particular commodity, the rise will of course encourage producers to make more. On the other hand, if prices fall either locally or throughout the world, producers will reduce production. This can result in serious difficulties for many producers, and may cause them to go out of business completely. Over-production of any commodity can also create difficulties, because it can lead to a glut on the market, which may cause prices to fall sharply.

Supplies of many commodities can generally be adjusted to suit market conditions. This means that changes in prices lead to changes in the quantity of a particular commodity which is made available to consumers. Household goods and furniture belong to this category. In such instances supply is said to be 'elastic', because it can be increased or decreased rapidly in response to market prices.

 

 

Exercise 1. Answer these questions, basing your answers on the text.

 

a. What are perishable goods?

b. What two things are usually the same in quantity?

c. What happens when the Law of Supply operates?

d. What does a rise in prices encourage?

e. What does a fall in prices cause?

f. What serious effect may a fall in prices have on some producers?

g. What can over-production lead to?

h. What happens when the supply of a commodity is adjusted to suit market conditions?

i. What kinds of goods belong to the category of commodities that can be adjusted easily?

j. What is meant by 'elastic' supply?

 

 

Exercise 2. Say whether these statements are true or false, and if they are false say why.

 

a. Bananas are typical of goods that easily deteriorate.

b. Steel can be stored for a long time without losing its value.

c. The actual stock of cars in a factory is usually the same as the supply of cars available on the market.

d. According to the Law of Supply, a rise in prices tends to reduce supply.

e. If prices fall locally, production will be reduced throughout the world.

f. When there is a glut on the market, demand decreases and prices fall.

g. Changes in prices lead to a change in the quality of a commodity.

h. Supply is 'elastic' because market prices rise and fall.

 

 

Exercise 3. Combine these pairs of sentences, using ' that ' and changing ' will ' to ' would '.

 

EXAMPLE: He told me something. The prices will change.

He told me that the prices would change.

a. They told him something. The committee will meet next week.

b. The economists expected something. The prices will fluctuate considerably.

c. The government anticipated something. The workers will demand higher wages.

d. The management decided something. The new factory will be located in a different city.

e. The development committee arranged something. The meetings will be held at regular intervals over the next two years.

 

 

Exercise 4. Punctuate the following passage. Provide capital letters, commas, full stops, brackets, colons etc., where applicable.

 

non-perishable goods such as coal steel cars and aeroplanes can be stored for considerable periods of time without loss of value this is not true however with perishables which must be placed on the market as quickly as possible if they are not sold quickly they will deteriorate if they deteriorate while in storage or in the shops both producers and distributors loss a large amount of money if there is a glut of certain perishables these commodities must be sold quickly even if the selling price is too low for a satisfactory profit

 

 

Exercise 5. Below are pairs of sentences. In the first sentence there is a verb in italics. In the second sentence there is a blank. Make the underlined verb into a noun in order to fill the blank.

 

EXAMPLE: manage = manage + ment = management

 

a. It is sometimes necessary to adjust the quantity of goods flowing on to the market. This _____ is made according to market conditions.

b. He arranged the committee meeting. His _____ were very efficient.

c. The government encourages private enterprise. Their _____ sometimes takes the form of financial help.

d. Some economists are interested in measuring changes in the price of essential commodities. This _____ extends over a period of years.

e. The management tend to assess the amount of money needed for the plan. The _____ was to be made by a special committee.

f. He decided to invest his capital in the new enterprise. His_____ might be very profitable.

 

Text B

Elasticity of supply, as a response to changes in price, is related to demand. Economists define 'demand' as a consumer’s desire or want together with his willingness to pay for what he wants. We can say that demand is indicated by our willingness to offer money for particular goods or services. Money has no value in itself, but serves as a means of exchange between commodities which do have a value to us.

People very seldom have everything they want. Usually we have to decide carefully how we spend our income. When we exercise our choice, we do so according to our personal scale of preferences. In this scale of preferences essential commodities come first (food, clothing, shelter; medical expenses etc.), then the kind of luxuries which help us to be comfortable (telephone, special furniture, insurance etc.), and finally those non-essentials which give us personal pleasure (holidays, parties, visits to theatres or concerts, chocolates etc.). They may all seem important, but their true importance can be measured by deciding which we are prepared to live without. Our decisions indicate our scale of preferences and therefore our priorities.

Elasticity of demand is a measure of the change in the quantity of a good, in response to demand. The change in demand results from a change in price. Demand is inelastic when a good is regarded as a basic necessity, but particularly elastic for non-essential commodities. Accordingly, we buy basic necessities even if the prices rise steeply, but we buy other things only when they are relatively cheap.

 

 

Exercise 1. Answer these questions, basing your answers on the text.

 

a. What is elasticity of supply a response to?

b. What is the definition of 'demand'?

c. How is demand indicated?

d. What is money?

e. What do we do when we exercise choice?

f. What comes second in our scale of preferences?

g. What is our third priority?

h. What is elasticity of demand?

i. When is demand inelastic?

Exercise 2. Say whether these sentences are true or false, and if they are false say why.

 

a. When people offer money for particular goods, they indicate that a demand exists.

b. Money is usually valuable in itself.

c. People do not usually have everything they want.

d. Basic needs come before luxuries.

e. Our decisions on how to use our money show what we need most and what we are willing to do without.

f. Demand for essential commodities is always elastic.

 

 

Exercise 3. Change these sentences in order to use the auxiliary verbs ' do ' or ' did '. These verbs are used for emphasis.

 

EXAMPLE: i. These goods and services have a value. – These goods and services do have a value.

ii. The people went to the city to find work.– The people did go to the city to find work.

 

a. These factors have an effect upon the economic system.

b. The management tried to change the methods.

c. The representatives of the employers and employees met last week.

d. The decision made by the trade unions affects everyone in the industry.

e. Short-term economic anarchy has a bad effect on longterm stability and investment.

f. The surplus money provided capital for a new housing scheme.

g. Stable conditions led to an improvement in the general state of the economy.

h. The government encourages new commercial enterprises.

i. A change in government usually means a change in policy.

j. The minister wanted to make a fundamental change in the national economic policy.

 

 

Exercise 4. Supply either ' the ' or ' an ' in the blanks in these sentences.

 

EXAMPLE: There is ___ demand for steel. ___ demand for steel is increasing.

There is a demand for steel. The demand for steel is increasing.

a. There is ___ shortage of bananas. ___ shortage of bananas will continue for some weeks.

b. There has been ___ change of government. ___ change in government will probably mean a change of policy. ___ change of policy may lead to ___ short period of instability. ___ short period of instability could create ___ feeling of insecurity

c. The speaker suggested ___ special commission to study economic conditions. He said that ___ special commission should examine all aspects of national economic life. ___ commission should investigate ___ demands of ___ workers and ___ conditions under which they work. It should also hear ___ views of employers. Such ___ commission would render ___ very valuable service to ___ nation.

 

 

Exercise 5. Give suitable opposites for these words

 

EXAMPLE: capitalism: communism

 

a. minority c. theoretical e. public g. solid i. longterm

b. maximum d. positive f. collective h. simplify

 

 

Supplement

Many words are formed by adding -able. There is however an active use of -able and a passive use. Try these exercises.

 

A The Active use of -able.

EXAMPLE: Fruit can perish. – Fruit is perishable.

 

NOTE that can is not always necessary in the first sentence.

 

a. The plan can work. d. These policies suit (us).

b. Market conditions can change. e. Those products have a value.

c. Economic conditions can vary. f. Some investments make a profit.

 

B The passive use of -able.

EXAMPLE: The difficulty can be avoided. – The difficulty is avoidable.

 

a. The commodity can be marketed. d. The relationship can be defied.

b. The plan can be tested. e. The product can be obtained.

c. The flow of work can be measured.

 

 

Essential Vocabulary

1. perishable goods швидкопсувні товари

2. durable goods//durables (споживчі) товари тривалого користування

3. deteriorate / go bad псувати(ся)

4. glut затоварювання (ринку)

5. assess оцінювати, визначати

6. adjust регулювати; пристосовувати; коректувати

7. measure оцінювати, визначати (характер тощо)

8. exercise користуватися (владою, привілеями); застосовувати

9. scale of preferences шкала переваг

10. priority пріоритет

11. steeply круто, стрімко

12. shortage / lack of нестача, дефіцит

13. render a service надати послугу

14. policy страховий поліс

UNIT 10 Some Economic Laws

Basic human needs are simple, but every individual has additional personal wants which may be very complex. These complex personal wants are satisfied in different ways by different things. A car, a bottle of whisky and a newspaper satisfy very different wants and the whisky is not a close substitute for the car. This special characteristic of satisfying a want is known in economics as its 'utility'. Utility is not the same as usefulness. A submarine, for example, may or may not be useful in peacetime, but it satisfies a want. Many nations want submarines. Economists describe this kind of utility as 'the relationship between a consumer and a commodity'.

Utility varies between different people and between different nations. A vegetarian does not want meat, but may rate bananas very highly. A mountain republic like Switzerland has little interest in submarines, while maritime nations rate them highly. Utility also varies with time. In time of war, the utility of bombs is high and that of pianos is low. Utility is therefore related to our sense of priorities. The utility of a commodity is also related to the quantity available to the consumer. If men buy a large quantity of paper, they will lose interest in buying more paper. The demand for paper will go down. The utility of a commodity consequently decreases as the consumer’s stock increases.

In most economic systems, the prices of the majority of goods and services are fixed. The individual cannot change the prices of the commodities he wants, and when planning his expenditure, he must accept these prices. A consumer will go on buying cigarettes as long as his satisfaction continues and they render utility. If he continues to pay the current price, his satisfaction is greater than his financial sacrifice. With each purchase, however, his satisfaction decreases, although the prices remain the same. If a consumer's supply of money is limited, a point will come when the financial sacrifice is greater than the satisfaction of smoking cigarettes. He will stop buying the commodity. The cigarettes are the same, but their utility has changed. If the prices rose, he would buy fewer; if they fell, he might buy more.

We can see that the nature of a commodity remains the same, but its utility changes. This indicates that a special relationship exists between goods and services on the one hand and a consumer and his money on the other hand. The consumer’s desire for a commodity tends to diminish as he buys more units of that commodity. This tendency is called the Law of Diminishing Marginal Utility.

Utility is of course related to the Laws of Supply and Demand. When economists talk about a Law of Supply, they mean that a rise in prices tends to increase the supply of a commodity, while a fall in prices tends to reduce it. When they talk about a Law of Demand, they mean that a fall in prices tends to increase the demand for a commodity, while a rise in prices tends to decrease the demand. In any economic situation, a consumer will decide to buy a commodity only in terms of its particular utility to him.

If the prices of a particular commodity rise in the economy as a whole, the rise will naturally encourage producers to make more of that commodity. If, on the other hand, prices fall locally or throughout the world, producers will reduce production. Supplies of many commodities can generally be adjusted to suit market conditions. This means that changes in market prices lead to changes in the quantity of a particular commodity made available to consumers. Household goods and furniture are in this category. In such instances, supply is said to be elastic because it can be increased or decreased rapidly to suit market prices.

The principle of elasticity operates in the area of demand as well as in the area of supply. People very seldom have everything they want. They usually have to choose carefully how they will spend their money. When they exercise this choice, they work according to their personal scale of preference, beginning with top-priority essentials like food and housing. Next on their scale come those commodities which provide comfort or convenience of some kind (telephones, insurance etc.) and finally come the non-essentials like holidays and trips to the theatre, which are important parts of life but not comparable with food and shelter. If it is necessary to pay very high prices for the essentials of life, people pay them – even if this means spending all their income. In such cases demand is inelastic. For non-essentials, however, demand is elastic and particularly responsive to changes in price.

 

 

Exercise 1. Answer these questions, basing your answers on the text.

 

a. What noun is used to show that whisky is not a simple replacement for a car? (§ 1)

b. What noun is used to show that nations are not at war? (§ 1)

c. What adverb is used to show that the utility of a commodity decreases because stock increases? (§ 2)

d. What verb is used to show that cigarettes provide utility as long as satisfaction continues? (§ 3)

e. What adjective is used to show that the price of cigarettes is the price ruling now? (§ 3)

f. What verb is used to show that a consumer's desire tends to 'go down' or 'become less' as he buys more of a commodity? (§ 3)

g. What noun is used to show that household goods and furniture belong to a certain type of commodity? (§ 5)

h. What adjective is used to show that food and housing are more important than other commodities? (§ 6)

 

 

Exercise 2. Say whether these sentences are true or false, and if they are false say why.

 

a. Switzerland is a maritime nation, and places a high priority on submarines.

b. lf the current price of cigarettes remains the same, consumers continue to buy more, even when their satisfaction is less than their financial loss.

c. Because a consumer's desire for a commodity tends to diminish as he buys more units of that commodity, economists talk of a Law of Diminishing Utility.

d. Because the supply of furniture and household goods can be adjusted to suit market conditions, we say that their supply is elastic.

e. Because elasticity of demand refers to things high on our scales of preferences, we can say that the demand for essentials like food, shelter is very elastic.

 

 

Exercise 3. Combine these pairs of sentences by using ' although '.

 

EXAMPLE: x = His satisfaction decreases. y = The prices remain the same.

i x although y = His satisfaction decreases, although the prices remain the same

ii although y, x = Although the prices remain the same, his satisfaction decreases.

 

a. x = The individual cannot change the current price. y = He may want to do so.

b. x = The utility of the cigarettes has changed. y = Their quality is the same.

c. x = He wants to buy that car now. y = He should wait until he has enough money for both the car and other necessary things.

d. x = The work has not been done yet. y = It was planned five years ago.

e. x = The scheme has been started. y = It has not yet received government permission.

 

 

Exercise 4. Punctuate the following passage. Provide capital letters, commas, full stops, brackets, colons etc., where applicable.

 

prices have risen throughout the national economy since 1954 between 1948 and 1953 there was a period of price stability the government decided in 1960 to change the national policy considerably and to introduce certain price controls although controls were not very popular with industrialists the government also tried to reduce demand by limiting increases in wages throughout the economy although limitation on wages was not very popular with the trade unions this limitation of wage increases applied to both the public and private sectors an official commission was created to regulate wages and price increases it was called the national prices and wages board or npwb

 

 

Exercise 5. Insert a suitable preposition in each of the blanks in the sentences.

 

a. He is interested ___ economics.

b. He is not concerned ___ non-essential commodities.

c. The demand ___ bananas will probably increase.

d. The supply ___ cigarettes dos not usually fluctuate.

e. The consumer's need ___ such commodities is well known.

f. There was a change ___ the quantity of material supplied.

g. He paid quite a lot of money ___ that car.

h. He paid the money ___ that man.

i. The American economic system is based ___ capitalistic principles.

j. Most citizens conform ___ the law of the country in which they live.

k. Non-essential commodities like chocolates cannot be compared ___ basic necessities like shelter.

Supplement

1. We call this type of diagram a histogram. This histogram shows the money spent on certain classes of commodity during 1990 in the state of Noland.

The vertical axis shows the value of the purchases per million dollars.

The horizontal axis lists the actual classes of commodity.

 

Answer the questions which follow.

 

a. How much actual money was spent on food in Noland in 1990?

b. How much was spent on clothing?

c. What is the sum-total of money spent on the three basic necessities?

d. How much was spent on the fourth class of non-perishable consumer goods?

e. How much less was spent on durables than on clothing?

f. How much more was spent on food than on housing?

 

 

2. Composition. Write about 400 words on the economist's concept of utility. Use the material in the units.

 

Revision Units 8-10

Exercise 1. In each set of words, one word is odd. What is this word?

 

1. indicate show appear demonstrate

2. consumer buyer user seller

3. commodities goods things products

4. production profit revenue earnings

5. wants needs requirements welfare

6. rise decrease growth increase

7. manufacture produce make show

8. company firm corporation business

9. particular modern given special

10. target aim objective view

 

 

Exercise 2. Non-, ir - can be used in front ofsome adjective to mean not. Write non- or ir- before these adjectives to make their opposites.

 

essential regular political

perishable relevant public

capitalistic responsible industrial

progressive communist agricultural

 

Now use suitable words to complete the following sentences.

 

1. Coal, steel, cars, computers – are ________ goods.

2. Most people in African countries can’t afford to buy ________ commodities.

3. Paper is a _________ commodity. It is produced in factories.

4. It’s _________ to ask such a question at the conference. This is of little importance now.

5. It was _________ of the highest officials not to think about the consequences of their economic policy.

 

Exercise 3. Which terms in the box are defined in sentences below?

utility demand wages interest capital equilibrium

1. A consumer willingness and ability to buy a product or service at a particular time and place.

2. The price at which goods and services actually change hands.

3. Satisfying individual wants is known in economics as its ________.

4. Payment for the use of someone else’s money or capital.

5. The price paid for the use of labour.

6. Something created by people to produce other goods and services.

 

Exercise 4. Vocabulary.

a) Match each verb in column A with a verb in column B that has similar meaning.

go downadditional

amountpriorities

rapidlyprevious

extraquantity

dangerobtain

getprovided

donedecrease

givenperformed

earlierrisk

preferencessharply

b) Use suitable form of verbs from the list to complete these sentences:

 

1. The employer _______ the surplus after he pays the necessary expense of his business and the wages of his employees.

2... Labour is any work ________ for an employer at a negotiated rate.

3... Ukrainians must spend a large _______ of money for buying a new flat.

4... Over-production of any commodity may cause prices to fall _______.

5... It was a high _______ to buy these bonds.

 

 

Exercise 5. Opposites.

Complete each sentence with the opposite of the word in parenthesis. Choose from the following list. Use each word once only.

macroeconomicsincreasewell-educated fall

exports newbeganregularly

1. Prices encourage producers to ________ their level of output. (DECREASE)

2. The development of modern economics ________ in the 17^th century. (FINISH)

3. I pay for the use of land_________. (SELDOM)

4. ________is the study of the economy as a whole. (MICROECONOMICS)

5. Business can improve productivity by investing in _______machines and other equipment. (OLD)

6. ________ workers perform their tasks more efficiently. (POORLY EDUCATED)

7. Average price level will _______ next month. (RISE)

8. _______ are goods and services sold to foreign buyers. (IMPORTS)

Exercise 6. Form nouns or adjectives from verbs listed below using the suffixes

-ment, -able. Translate words you have got.