Vocabulary:

to affect – затрагивать, влиять

to concern – заботиться, проявлять интерес

developed countries – развитые страны

developing countries – развивающиеся страны

background – фон, задний план

content – содержание

cultural heritage – культурное наследие

Task 8. Explain the following words and word combinations:

standard of living, global problems, «monoculture», in the background, heritage

Task 9. Read the text again and find out the advantages and disadvantages of globalization

The Debate on Globalization
for	against
- increase in international investment

For example: I think that globalization leads to the increase of international investment.

Task 10. Look at the cartoons and comment on them (see p. ). What effects and problems of globalization do they express? 

Task 11. Topics for discussion:

- Is globalization a threat or a promise for national economies and prosperity of the people?

- What does globalization mean for Russia?

- Is globalization a natural phenomenon or someone’s project?

- Will it lead to stabilization of international relations or to world anarchy?

XII. Competition

competition [ֽkompi'ti∫ən] – конкуренция to compete – конкурировать competitor – конкурент competitive – конкурирующий

Task 1. Read and translate the text.

Competition is the economic rivalry among businesses when producers in some industry try to get a larger share of the market. Perfect competition and pure monopoly are the opposite extremes of the market structure continuum. Perfect competition has many sellers of the same product, while pure monopoly has only one. Perfect competition exists when there are many buyers and sellers, none of whom control prices. In contrast, pure monopoly exists when a sin­gle firm controls the total production or sale of a good or service.

Four conditions must be present in the market structure for perfect competition to exist:

1. A particular good or service must have many sellers and buyers. The goal of these sellers is to attract enough buyers to their busi­nesses to earn a profit.

2. The good or service being offered by one compet­ing firm must be similar or identical to those offered by other firms. In such a situation, buyers will have a free choice.

3. Buyers must have easy access to information on the products and prices. This information allows buyers to make intelligent choices about which goods to purchase.

The conditions necessary for the existence of pure monop­oly are very different from those necessary for the existence of perfect competition:

1. One firm is the sole producer or seller of a good or service.

2. No close substitute goods are available. Electric power companies are examples of monopolies because each company is the exclusive supplier of electricity in a specific geographic area. While consumers may choose to substitute kerosene lamps and wood stoves for electricity, these substi­tutes are not close substitutes.

In many countries, airlines are monopolies. For example, only Aviaco, an airline owned by the Spanish government, provides service between Spanish cities. In theory, Aviaco has the freedom to charge any price for airline tickets. In reality, if the price is too high travellers will use alternate forms of transportation, such as automobiles, trains, or buses. In addition, the Spanish government sets limits on the charged prices.

The United States government has determined that four types of monopolies are beneficial to the economy. These monopolies include:

- natural monopolies (American Telephone & Telegraph Company and other public utilities which have the exclusive right to provide service in a spe­cific geographic region),

- technological monopoly which occurs when a firm develops new technology that changes the way goods are produced or creates a new product (General Dynamics),

- government monopo­lies which provide goods or services that improve the general welfare rather than try to earn profits (the Postal Service),

- geographic monopoly which is the firm, producing and selling a good or service in a specific location. As a rule, a competitor cannot be attracted to the area because of poor business perspectives.