Economics for a Beginning Student (110

МИНИСТЕРСТВО ОБРАЗОВАНИЯ И НАУКИ РФ ГОСУДАРСТВЕННОЕ ОБРАЗОВАТЕЛЬНОЕ УЧРЕЖДЕНИЕ

ВЫСШЕГО ПРОФЕССИОНАЛЬНОГО ОБРАЗОВАНИЯ «ВОРОНЕЖСКИЙ ГОСУДАРСТВЕННЫЙ УНИВЕРСИТЕТ»

ECONOMICS FOR A BEGINNING STUDENT

Учебно-методическое пособие для вузов

Составитель И.Г. Агафонова

Издательско-полиграфический центр Воронежского государственного университета

2011

UNIT 1

Pre-reading task.

I.Show why the following statements are incorrect.

1.Aid is all the help LDCs need.

2.LDCs do best by sticking to production of raw materials for the world economy.

II.Read the text.

Aid and Migration (Text 1)

The quickest way to equalize world income distribution would be to permit free migration between countries. Residents of poor countries could go elsewhere in search of higher incomes. And in emigrating, they would increase the capital and land per worker for those who stayed behind.

Nor is this idea entirely fanciful. The massive movements of population from Europe to the Americas and the colonies in the nineteenth and early twentieth centuries represented an income-equalizing movement of this sort. Since the Second World War the major migrations have been temporary, although the steady flow of Mexicans (illegally) across the US border is one major exception. More common has been the use of temporary migrant labour in Europe (especially West Germany) from Yugoslavia, Greece, and Turkey, which countries have all benefited from payments sent home to their families by workers temporarily abroad. Similarly, Egypt, India, and Pakistan receive significant transfer payments from workers temporarily abroad (especially those working in the Persian Gulf). And in 1989–90 we saw substantial westward migration from Eastern Europe as the barriers came tumbling down.

None the less, there is no free and unrestricted immigration to the rich countries today. Indeed, even migrant workers are frequently outlawed. One difference between conditions today and conditions during the massive migrations

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of the nineteenth century is that there are now extensive systems of welfare and public health in rich countries. Quite apart from any racial or religious arguments, opponents of immigration say that existing residents would end up subsidizing unskilled immigrants who would spend most of their lives receiving public handouts.

The United States grew extremely quickly during the period of large-scale immigration. With economies of scale, it is not clear that existing residents inevitably lose out by admitting immigrants. Although fascinating, the question is largely academic. At present there seems little prospect of the rich countries allowing immigration on a significant scale, least of all from the poorest countries of the world economy.

III.Answer the following questions.

1.Why have LDCs been particularly successful in exporting textiles, clothing and leather footwear?

2.Can a small LDC gain by a policy of import substitution?

IV. Check up the pronunciation of unfamiliar words in a dictionary and read Text 2 aloud.

Aid and Migration (Text 2)

1. There is a way to equalize world income distribution. 2. It is to permit free migration between countries. 3. This process was observed in the nineteenth and early twentieth centuries. 4. Since the Second World War the major migrations have been temporary. 5. More common has been the use of temporary migrant labour in Europe (especially West Germany). 6. Yugoslavia, Greece, and Turkey have all benefited from payments sent home by workers abroad. 7. Similarly, Egypt, India, and Pakistan receive significant transfer payments from workers abroad. 8. And in 1989–90 we saw substantial westward migration from Eastern Europe. 9. There is no free and unrestricted immigration to the rich

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countries today. 10. There is one difference between conditions today and conditions during the massive migrations of the nineteenth century. 11. There are now extensive systems of welfare and public health in rich countries. 12. Opponents of immigration say the following. 13. Existing residents would end up subsidizing unskilled immigrants. 14. The United States grew extremely quickly during the period of large-scale immigration. 15. It is not clear that existing residents inevitably lose out by admitting immigrants. 16. At present the rich countries do not allow immigration on a significant scale. 17. They are against immigration from the poorest countries of the world economy.

V.Write out from Text 2 the English equivalents for the following words and

expressions.

1. способ, выравнивать, распределение мировых доходов; 2. разрешать, свободная миграция; 3. наблюдать, столетие; 4. большая иммиграция, временный; 5. распространенный, особенно, Западная Германия; 6. Греция, Турция, получать выгоду, платежи, посылать, за границей; 7. подобным образом, Египет, значительные трансфертные платежи; 8. существенный, направленный к западу; 9. свободная и неограниченная иммиграция; 10. различие, условия, массовая миграция; 11. обширная система, благосостояние, здравоохранение; 12. противники; 13. существующие резиденты, прекращать субсидирование, неквалифицированные иммигранты; 14. чрезвычайно, крупномасштабная иммиграция; 15. ясный, неизбежно, терять, принимать иммигрантов; 16. разрешать иммиграцию, в значительном масштабе; 17. быть против, мировая экономика.

VI. Translate Text 2 into Russian (in writing).

VII. Translate the Russian version of Text 2 into English (orally).

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VIII. Make up meaningful phrases with the following.

1. there + to be, a way to equalize; 2. it, to be, to permit; 3. this process, to be observed; 4. since, the migration, temporary; 5. more common, the use of temporary labour; 6. Greece, to benefit, payments sent home; 7. Egypt, to receive significant payments; 8. we, to see, substantial migration; 9. there + to be, no free immigration; 10. there + to be, one difference, conditions today; 11. there + to be, extensive systems, welfare; 12. opponents, to say; 13. existing residents, to end up, subsidizing; 14. the United States, to grow, extremely quickly; 15. it, not to be clear, existing residents, to lose out; 16. the rich countries, not to allow; 17. they, to be against.

IX. Complete the following questions:

1). What way to equalize world income distribution? 2). When was the process? 3). What countries have benefited from? 4). When did we see substantial westward? 5). What systems of welfare and health? 6). How did the United States grow during the period of? 7). What don’t the rich countries?

X.Replace the Russian words and expressions with their English equivalents.

1.There is a way to equalize (распределение мировых доходов). 2. The process of migration (наблюдаться) in the nineteenth and early twentieth centuries. 3. Since the Second World War the major migrations have been (временный). 4. There is no free and (неограниченный) immigration to the rich countries today. 5. There are now (обширный) systems of welfare and public health in rich countries. 6. (Противники) of immigration say the following. 7. Existing (резиденты) would end up subsidizing, unskilled immigrants. 8. The United States grew (чрезвычайно быстро) during the period of large-scale immigra-

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tion. 9. At present time the rich countries (не разрешать) immigration on a significant scale. 10. They (быть против) immigration from the poorest countries of the world economy.

XI. Summarize in 10 sentences the contents of Text 2.

XII. Translate into Russian the first paragraph of Text 1.

XIII. In several sentences describe the economic situation in LDCs. The following words and expressions will help you:

1. in the world’s poorest countries, the growth of population, to be fast; 2. labour productivity, to be low; 3. LDCs, to be reluctant, to exploit, a comparative advantage in primary products; 4. LDCs, to increase, export of labour-intensive manufactures; 5. market share, could quickly become, more significant; 6. trade, to help the LDCs, more effectively than aid; 7. migration, to help, to equalize world incomes; 8. rich countries, to be against, significant immigration.

UNIT 2

Pre-reading task.

I.Answer the question.

1. The interplay between what concepts determines the quantity of the goods that is produced and the price at which it is bought and sold? Explain your point of view.

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II.Read Text 1.

Demand, Supply, and Equilibrium (Text 1)

Demand is the quantity of a good buyers wish to purchase at each conceivable price.

Thus demand is not a particular quantity, such as six bars of chocolate, but rather a full description of the quantity of chocolate the buyer would purchase at each and every price which might be charged. The first column of Table 1 shows a range of prices for bars of chocolate. The second column shows the quantities that might be demanded at these prices. Even when chocolate is free, only a finite amount will be wanted. People get sick from eating too much chocolate. As the price of chocolate rises, the quantity demanded falls, other things equal. We have assumed that nobody will buy any chocolate when the price is more than £0.40 per bar. Taken together, columns (1) and (2) describe the demand for chocolate as a function of its price.

Table 1. The demand for and supply of chocolate

Supply is the quantity of a good sellers wish to sell at each conceivable price. Again, supply is not a particular quantity but a complete description of the quantity that sellers would like to sell at each and every possible price.

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Notice the distinction between demand and the quantity demanded. Demand describes the behaviour of buyers at every price. The term “quantity demanded” makes sense only in relation to a particular price. A similar distinction applies to supply and quantity supplied.

We must recognize that the demand schedule relating price and quantity demanded and the supply schedule relating price and quantity supplied are each constructed on the assumption of “other things equal”. In the demand for football tickets, one of the “other things” that is important is whether or not the game is being shown on television. We must examine how the price adjusts to balance the quantities supplied and demanded, given the underlying supply and demand schedules relating quantity to price.

Let us think again about the market for chocolate described in Table 1. Other things equal, the lower the price of chocolate, the higher the quantity demanded. Other things equal, the higher the price of chocolate, the higher the quantity supplied. A campaign by dentists warning of the effect of chocolate on tooth decay, or a fall in household incomes, would change the “other things” relevant to the demand for chocolate. Either of these changes would reduce the demand for chocolate, reducing the quantities demanded at each price. Cheaper cocoa beans, or technical advances in packaging chocolate bars, would change the “other things” relevant to the supply of chocolate bars. They would tend to increase the supply of chocolate bars, increasing the quantity supplied at each possible price.

III.Answer the following questions.

1.What economic categories do Western economies rely on to allocate resources between competing uses?

2.What economic term is appropriate to call the behaviour of buyers: demand or supply? Give your reasons.

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