II. Complete the sentences as in the text:

1. Economists talk about two types of advantages that an economy… 2. An economy with absolute advantage can produce… 3. An economy with comperetive advantage can produce…

III. Complete each sentence with a word from the box.

Comparative, exploit, incentive, quota, restrict, specializes, stimulate, tariffs

1. All countries try to the natural resources that they

have.

2. . are a kind of tax that the government puts on imported

goods.

3. Low interest rates can help to the economy and make

it grow.

4. A rise in salary is an to make people work harder.

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5. The UK economy in services such as banking and

insurance.

6. Governments sometimes need to the flow of imports

and exports.

7. The opposite of absolute is

8. They have a which must be fulfilled if they want to

keep the contract.

IV. Now read the text again and decide whether these statements are true or false.

1. Imports can be good for an economy.

2. A country’s natural resources can give it an absolute advantage over other countries.

3. A country with an absolute advantage will always have a comparative advantage, too.

4. A small economy can have a comparative advantage over a larger economy.

5. Specializing in one area of trade will give a country a comparative advantage.

6. Tariffs and quotas are used in order to increase imports into the economy.

V. Discuss the following with your partner.

Do you remember these ideas from earlier units? Tell your partner what you know about these things:

• opportunity cost

• economic welfare

• the benefits of an open economy

VI. Discuss this question with your partner.

— Why do you think governments sometimes use tariffs and quotas to restrict free trade with other countries?

VII. Say what you have learned about:

• Imports stimulate competition

• Two types of advantages: absolute and comparative

• Opportunity cost – to give smith in order to have it

• Economic welfare of trading countries

• The use of restricting imports – an import quota

Think and give extensive answers.

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Grammar exercises

VIII. Translate the sentences.

Practise the use of Complex Subject (§ 21).

1. Newly established companies are supposed to be the essential part of their business. 2. The passwords are known to be used for restricting access to the company’s information. 3. High quality goods are expected to be sold at the annual sales. 4. The lower company taxes are assumed to promote domestic industry development. 5. The general definition of markets is considered to have been adopted only some years ago. 6. Much of economics is thought to be devoted to the theory of how society solves the problem of what to produce. 7. Each individual’s expenditure is assumed to contribute to some other individual’s income. 8. The extent of public ownership in industry is believed to depend largely on political ideology.

IX. Supply the correct forms of the verbs (§ 11). Translate the sentences.

1. Benefits (to see) usually clearly. 2. The person (to feel) satisfaction when he (buy) things he (to dream) about for a long time. 3. A person (to be) economically free if he can (to do) what he (to wish) with his own property, time and effort. 4. The main aim of all firms (to be) the same: to maximize profit though there may be alternative aims as well. 5. The aim of macroeconomics (to be) to examine and explain facts for the total nation. 6. A business (to need) some financial capital to start before the corresponding revenue (to earn). 7. Despite of all advantages of international trade sometimes countries (to restrict) trade to support home manufacturers. 8. Wellfare of countries (to stimulate) their trade with lots of different states.

At leisure 1. Read the article without a dictionary, try to retell it.