Text 3 The Elements of Risks

a). Read the text and specify the kind of risk discussed.

b). Entitle each paragraph.

c). Translate the text.

Of course, not every new idea is a good one. Sometimes expensive equipment and labor are assembled to make things that few people want. Sometimes the enterpriser is less effective as a manager than he thought he would be. Besides, a better idea, a superior product, or a cheaper process may be developed a little later. In each of these cases, the enterpriser has to admit that he has made a mistake: (1) because the labor, materials, and equipment assembled by the firm have actually produced something less valuable than they could have produced in some other employment, and (2) instead of raising productivity, the enterpriser has actually lowered it.

Society must protect itself from the consequences of such mistakes by making sure that enterprisers balance the gains possible from successful organization against the losses in case of failure. That is why the enterpriser is required to finance part of the investment with his own money and to receive, as his reward, only the residual of the value added by the operation, after all claims have been paid. If he is successful in using labor, equipment, and materials to produce a valuable thing, the profit resulting from the difference in value is his. If he puts valuable resources to a less valuable use, the loss is also his. His investment acts as a buffer to the rest of society, protecting it from enterpriser’s mistake.

Exercises

1. Find the English equivalents in the text:

дорогое оборудование, эффективное предприятие, превосходная продукция, сделать ошибку, повысить производительность, предоставить ресурсы, последствия ошибок, удостовериться, успешная организация, капиталовложение, платить по счетам, доходная работа, ценные ресурсы.

2. Match the words from list A with their synonyms from list B:

A. idea, expensive, manager, employment, to raise, to lower, resources, gain, to require, to receive, value, operation, investment, residual.

B. rest, possibilities, to decrease, application, to increase, valuable, director, thought, contribution, action, to get, cost, to demand, income.

3. Give antonyms of the following words:

good, expensive, few, effective, better, later, less, to raise, gain, success, to receive, profit.

4. Give derivatives of the following words and translate them:

value, to employ, success, to fail, to invest.

5. Find the possible translations of the words in the dictionary:

idea, develop, employ, rest, valuable.

6. Write definitions for the following notions:

expensive equipment, manager, superior product, to raise productivity, to low productivity, to commit resources to new uses, to finance the investment, valuable job, valuable resources.

7. Answer the questions:

1. What kind of mistakes may an entrepreneur make?

2. What are the possible consequences of his mistakes?

3. In what way may society protect itself from the consequences of such mistakes?

4. Why must an enterpriser finance part of the investment with his own money?

8. Render into English:

Иногда предприниматель допускает ошибки. Тогда труд, материалы и оборудование фирмы приносят меньше дохода, чем могли бы. Производительность фирмы не повышается, а понижается. Общество должно обезопасить себя от последствий таких ошибок. Оно должно убедиться, что предприниматель умеет сбалансировать возможные доходы с возможными убытками. Поэтому предприниматель финансирует часть капиталовложения своими деньгами. Он получает свою долю прибыли или убытка после того, как все счета оплачены.