Vocabulary exercises

1. Which of the following statements are true/false according to the text? Correct the false sentences:

1. We already know that a market is a mechanism or arrangement which brings buyers into contact with one another.
2. Deci­sions made by buyers and sellers of products and resources become effective through a system of markets.
3. These prices are guideposts on which resource owners, entrepreneurs, and consumers make and revise their free choices as they pursue their self-interests.
4. Through this com­munication system, society decides what the economy should produce, how produc­tion can be efficiently organized, and how the fruits of productive effort are distributed among the businessmen.
5. The «interaction» between demand and supply in markets influences prices.
6. Understanding how changes in supply and demand affect prices is an important component of political life.
7. When a prospective college student, for example, contemplates majors, she might speculate about where demand for workers is increasing fastest, because wages and job opportunities will probably be greatest in those occupations.
9. Many public policy decisions, such as changes in the tax code, in­volve changing incentives with the hope of changing behaviour.
10. But barter can pose serious problems for the economy because it requires a coincidence of wants between more than seven transactors.
11. Economies use money in order to overcome such a stalemate.
12. Foreign ex­change markets permit US residents, Japanese, Germans, Britons, and Mexicans to exchange dollars, yen, euros, pounds, and pesos for one another to complete international exchanges of goods and services.

2. Fill in the gaps with the words and expressions given below:

1. Without a market economy, there is no capitalism and ________ made by buyers and sellers of products and resources become effective through a system of markets.

2. The _________ of sellers and buyers are reflected in their choices.

3. _________ is the process of identifying and starting a new business venture, sourcing and organizing the required resources.

4. Just as _______ is the controlling mechanism, so a system of markets and prices is the basic organizing force.

5. Those who obey the dictates of the ________ are rewarded; those who ignore them are penalized by the system.

6. The fruits of productive effort ________ the individual economic units.

7. The ________ between demand and supply in markets _______ prices.

8. An economically literate person realizes that prices are important signals that reflect underlying changes in _______ and demand.

9. When prices change then trade-offs change, and people's _______ change.

10. The ______ for software engineers has increased lately and, subsequently, that wages for those jobs have also risen.

11. When governments interfere with these_________, society is usually worse off.

12. When people hear the word «price» they usually associate it with the word «_______».

13. But barter can pose serious problems for the economy because it requires a coincidence of wants between the two ________.

14. Historically, cattle, cigarettes, shells, stones, pieces of metal, and many other _________ have been used, with varying degrees of success, as a medium for facilitating ex­change.

15. On a global basis the fact that different nations have different _______ complicates international specialization and ________.

Entrepreneurship, market adjustments, commodities, interaction, decisions, affect prices, influences, transactors, supply, market system, exchange, competition, money, deci­sions, preferences, demand, currencies, are distributed among.