3. Explain the meaning of the following words and word combinations.

The social process of tradition, the political process of command, a market process, a transaction, a competitor, to produce a service, an economic system, a market economy.

4. Choose the variants that best explain the ideas of the sentences below.

1. All the three processes (social, political and market) are at work to some extent in every society.

1. The elements of all the three processes can be found in any society.

2. All the three processes exist until the government interferes in them.

2. If you are growing tomatoes in your backyard “for sale”, you are producing “for the market”.

1. If you are growing tomatoes for sale you are involved in a market process.

2. If you want to grow tomatoes you should sell them at the market.

3. Whenever you sell your tomatoes they will be re-sold at the market.

5. Comment on the following sentences in economic sense.

The productive ones get to consume and live. The unproductive ones die.

6. Practise reading §§ 8 and 9. Translate them into Russian. Give a short summary of the passage.

7. Give profound answers to the following questions.

1. What are three basic economic questions?

2. What are three basic economic social choices?

3. Why is it unnecessary to produce by yourself everything you need?

4. Why is the market process said to be an extension of the way things work in nature?

5. In what way does a market modify the natural “produce and consume” cycle?

6. How is a market defined in professional terms?

C. How the text is organised

1. What are these concepts associated with in the text? Match them.

social process	market economy
political process of command	traditional economy
free actions of individuals and businesses regulated through price mechanism	command economy
surviving of the strongest ones and dying of the weakest ones	market
exchange goods and services	laws of the nature

2. The idea of which paragraphs is summarized in the following sentences?

1. The market process modifies the process in the nature.

2. A market is not only a place.

3. Traditional economy is inefficient in advanced societies.

4. You need not produce everything for yourself.

5. Any type of economy is based on the economic choice of the society.

6. Any individual transaction is the part of a market process.

3.Find the paragraphs of the text dealing with the following concepts.

Concepts of a market and a market economy; economic choices and basic economic questions; the most efficient type of economy.

V. Additional Reading

Read the following texts to learn more about the problem under discussion.

Types of Market Economies

1. In our diverse society even a market economy strictly restrained by the laws of supply and demand can not exist in the same forms. It may be explained by differences between cultures and the levels of development of the societies which have entered the market. Obviously, Great Britain where the Industrial Revolution took place and post-Soviet countries can not use the same market mechanisms. Hence the variations in market economies.

2. Capitalism generally refers to an economic system in which the means of production are all or mostly privately owned and operated for profit, and in which investments, distribution, income, production and pricing of goods and services are determined through the operation of a market economy. In capitalism, there is no central planning authority but the prices are decided by the demand-supply scale. Capitalism has been dominant in the Western world since the end of feudalism, but most feel that the term "mixed economies" more precisely describes most contemporary economies, due to their containing both private-owned and state-owned enterprises, combining elements of capitalism and socialism, or mixing the characteristics of market economies and planned economies.

3. Laissez-faire is synonymous with what was referred to as strict capitalist free market economy during the early and mid-19th century as an ideal to achieve. It is generally understood that the necessary components for the functioning of an idealized free market include the complete absence of government regulation, subsidies, artificial price pressures and government-granted monopolies (usually classified as coercive monopoly by free market advocates) and no taxes or tariffs other than what is necessary for the government to provide protection from coercion and theft and maintaining peace, and property rights.

4. Anarcho-capitalism, market anarchism or individualist anarchism advocates a true free market like laissez-faire and in addition the complete elimination of the state apparatus; the provision of law enforcement, courts, national defense, and all other security services by voluntarily-funded competitors in a free market rather than through compulsory taxation; the complete deregulation of nonintrusive personal and economic activities; and a self-regulated market. Anarcho-capitalists argue for a society based in voluntary trade of private property and services in order to maximize individual liberty and prosperity.

6. Market socialism refers to various economic systems in which the government owns the economic institutions or major industries but operates them according to the rules of supply and demand. In a traditional market socialist economy, prices would be determined by a government planning ministry, and enterprises would either be state-owned or cooperatively-owned and managed by their employees. The People's Republic of China currently has a form of market socialism referred to as the socialist market economy, in which most of the industry is state-owned, but prices are not set by the government.