English guide for economists and managers (руководство на английском языке для экономистов и менеджеров). Учебное пособие

2. ... (until / under) the assumption ... (of / from) perfect competition, supply is determined by marginal cost.

3. ... (in / after) the long run, firms have a chance to adjust their holdings

... (of / for) physical capital, enabling them to better adjust their quantity supplied ... (on / at) any given price.

4.Consumers will be willing to buy a given quantity (for / of) a good, at a given price, if the marginal utility (of / from) additional consumption is equal (for / to) the opportunity cost.

5.Economists also distinguish the short-run market supply curve ...

(from / to) the long-run market supply curve.

Writing

Task 1. Translate into English in written form the part of the sentence given in brackets.

1.Let’s discuss (четыре основных закона спроса и предложения).

2.(Если спрос остается неизменным и предложение уменьшается,

случается дефицит), leading to a higher equilibrium price.

3.This is true because each point (кривой спроса является ответом на вопрос) «If this firm is faced with this potential price, (сколько товара она сможет и желает продать)?».

4.The demand schedule (определяется как желание и способность потребителя купить данный продукт) in a given frame of time.

Task 2. Choose any product. Imagine and write down 4 reasons why you are going to buy it in another place.

Example: 1. I think the price for these boots is too expensive here. 2. There are no boots of the colour I like, etc.

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UNIT VI

FACTORS OF PRODUCTION.

LABOUR, CAPITAL AND LAND

Starting up

Before studying the material of Unit VI, read and memorize the definitions of the key terms of this unit.

Capital:

–wealth (money and property) that may be used for the production of more wealth; money with which a business, etc., is started (e.g. for building or buying factories, machinery); a man-made resource.

Capital:

–wealth (money and property) that may be used for the production of more wealth; money with which a business, etc., is started (e.g. for building or buying factories, machinery); a man-made resource.

Labour:

–bodily or mental work; human effort (physical and mental) which is directed to the production of goods and services.

Labour:

–bodily or mental work; human effort (physical and mental) which is directed to the production of goods and services.

Land:

–solid part of the earth’s surface; ground as used for farming, etc.; property in the form of land; one of the factors of production.

Entrepreneur:

–a person controlling a commercial undertaking.

Wealth:

– (possession of) great amount of property, money, etc.; riches; simply the stock of all those goods which have a money value.

Words and Expressions to be studied:

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While reading the text of this Unit, you’ll find these words and expressions. They will be given as italicized ones. You may also consult any English-Russian dictionary.

Vocabulary

Task 1. While reading the text «Some words about factors of production» find the following English words in it and a) read these words correctly; b) put them in the alphabetic order; c) answer to the question: «Who is known as the entrepreneur»?

Theory, human, organize, equipment, labour, natural, process, job, exchanged, raw, contribution, type, circulating.

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Task 2. Define what parts of speech are the following words.

Financial, manufacture, capital, purpose, lowest, knowledge, greatly, wages, good, someone.

Task 3. Complete each sentence, using the words given. One word may be used once. Give translations of these words and define what part of speech they are.

upon, individually, three, minimizes, productive, many, or, knowledge, should, classify

1.Human capital is ... that contributes «know-how» to production.

2.One can ... labour into ... and unproductive.

3.Workers supply labour either ... or through trade unions.

4.Industry also depends ... availability of coal-mines ... waterfall for electricity production.

5.The third factor of production, natural resources (land), poses too ...

economic problems to be discussed.

6.There must be a person or persons, who will organize these ... factors so that production take place.

7.One ... choose the combination of factors which ... the cost of production and increases profits.

Task 4. There are some words:

Basis, money, purpose, high, artificial, final, richness, currency, unemployment, living, foundation, natural, aim, maximum, lifeless, manufacture, last, affluence, minimum, step, immense, variety, produce, stage, employment, low, multiplicity, huge.

Fill in the table according to the sense. The first line in the table has been already done for you as an example. Time for doing this task is limited – 5 minutes. Mind the time.

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Reading

Task 1. Discuss these questions in pairs.

a)How many factors of production are there?

b)What kinds of capital do you know? Can you give any examples?

c)Why do economists sometimes identify a forth factor of production – enterprise?

Some words about factors of production

Factors of production are resources used by firms as inputs for a good or service to be produced. Factors of production are as follows: capital, labour, and natural resources (land), enterprise. Now, let’s get acquainted with them.

Capital. In economic theory, the term «capital» refers to goods and money used to produce more goods and money. Classifications of capital vary with the purpose of the classification. The most general distinction is the one made between physical, financial, and human capital. Physical capital is land, buildings, equipment, raw materials. Bonds, stocks, available bank balances are included in the financial capital. They both make great contribution to production.

To group capital into fixed capital and circulating capital is common practice. The former refers to the means of production such as land, buildings, machinery and various equipment. They are durable, that is, they participate in the production process over several years. This type of capital does not change its form in the course of production and moves from one stage to the next – it is «fixed».

Circulating capital (is sometimes called working capital) includes both non-renewable goods, such as raw materials and fuel, and the funds required to pay wages and other claims against the enterprise. Nonrenewable goods used up in one production cycle and their value is fully

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transferred to the final product. This kind of capital is called circulating capital because it keeps moving and changing. Materials are changed into finished goods which are then exchanged for money and this in turn is used to buy more materials.

Human capital is knowledge that contributes «know-how» to production. It is increased by research and disseminated through education. Investment in human capital results in new, technically improved products and production processes which improve economic efficiency. Like physical capital, human capital is important enough to be an indicator of economic development of a nation.

Labour. It is common, in economics, to understand labour as an effort (physical and mental) needed to satisfy human needs and which is directed to the production of goods and services. It is one of the three leading elements of production. Labour has a variety of functions: production of raw materials, manufacturing of final products, transferring things from one place to another, management of production, and services like the ones rendered by physicians and teachers. It must be borne in mind that it is services of labour which are bought and sold, and not labour itself. The firm cannot buy and own labour in the same way that capital and land can be owned.

One can classify labour into productive and unproductive. The former produces physical objects having utility. The latter is useful but does not produce material wealth. Labour of the musician is an example. Unlike other factors of production, for example capital, once workers are employed, their efficiency can vary greatly with organization of work and their motivation.

Demand for labour is influenced by the demand for goods produced by workers, the proportion of wages in total production costs, etc. The supply of labour depends upon the size of population, geographic mobility, skills, education level (human capital), etc. Workers supply labour either individually or through trade unions. If demand for and supply of labour are not in equilibrium, there is unemployment. The rate of unemployment is a percentage of the total labour force without a job. It is desirable for an economy to have the lowest possible unemployment rate and to achieve higher employment as neither full use of resources nor maximum level of output can be achieved in an economy having unemployment.

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Land. The third factor of production, natural resources (land), poses too many economic problems to be discussed. Dr. Alfred Marshall defined land as no merely land in the strict sense of the word, but whole of the materials and forces which nature gives freely for man’s aid in land, water, in air and light and heat.

Land stands for all nature, living and lifeless. It includes all natural resources that human being get free from air, water and land. In short, the term «land» refers all that nature has created on the earth, above the earth and below the earth’s surface.

Land as a factor of production is of immense importance. Land is the original sources of all material wealth. The economic prosperity of a country is closely linked with the richness of its natural resources. The quality and quantity of agricultural wealth of a country depends on nature of soil, climate, rainfall. The agricultural products are the form and the basis of trade and industry. Industry also depends upon availability of coal-mines or waterfall for electricity production. Thus all aspects of economic life (i.e. agriculture, trade and industry) are generally influenced by natural resources which are called as «Land» in economics. The importance of land is therefore too much as it is influencing finally on the standard of living of the people.

The entrepreneur. As mentioned earlier, economists sometimes identify a forth factor of production – enterprise. It is held that, left to themselves, land, labour, and capital will not produce anything. There must be a person or persons, who will organize these three factors so that production take place. Someone must take the decisions (a) what to produce (i.e. the type of good or service and the quantity); (b) how to produce (i.e. the methods of production); (c) where to produce (i.e. the location of the enterprise). Whoever takes the decisions, and the consequent risks, is known as the entrepreneur. There is no really suitable English word to describe such a person, perhaps «enterpriser» is the nearest we can get. The entrepreneur is the person who undertakes production with a view to profit.

Factors of production are combined together in different proportions in order to produce output. It is assumed in economics that one should choose the combination of factors which minimizes the cost of production and increases profits.

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Task 2. Translate the following words and phrases into English.

Затраты на производимый товар или оказанную услугу, доступный остаток счета (в банке), делать большой вклад в производство, сырье и топливо, знание, другие претензии к предприятию, инвестиции в человеческий капитал, улучшать экономическую эффективность, доля заработной платы, богатство (изобилие) природных ресурсов, угольная шахта, местоположение, с целью получения прибыли, сводить к минимуму затраты на производство.

Task 3. Join pairs of the following words and phrases according to the meanings.

Task 4. Define whether these statements are true or false:

1.There are four factors of production: capital, wealth, and natural resources (land), enterprise.

2.Working capital is sometimes called circulating capital because it keeps moving and changing.

3.Investment in human capital results in new, technically improved, products and production processes which don’t improve economic efficiency.

4.The firm can buy and own labour in the same way that capital and land can be owned.

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5.Land stands for all nature, living and lifeless and includes all natural resources that human being get free from air, water and land.

6.Factors of production are combined together in different proportions in order to produce output.

Language review

Task 1. Change each of the following sentences into Past and Future Simple.

1.In economic theory, the term «capital» refers to goods and money used to produce more goods and money.

2.Labour has a variety of functions: production of raw materials, manufacturing of final products, management of production, etc.

3.One can classify labour into productive and unproductive.

4.This type of capital does not change its form in the course of production – it is «fixed».

5.There is no really suitable English word to describe such a person.

Task 2. Make up 4 questions of the different types on the text «Some words about factors of production».

Task 3. Choose the correct tag to the given sentences among the variants (consult the note below).

Note (примечание):

tag – лингв. «хвост», вторая часть в структуре разделительного вопроса (tag question), превращающая утверждение в собственно вопрос, который можно рассматривать как краткий вопрос общего типа. В кратком вопросе повторяется вспомогательный, модальный или связочный глагол первой части предложения.

Если сказуемое предложения, содержащего заявление (первая часть), выражено глаголами to be (is, are, was, were) или to have (has), то повторяются эти глаголы.

Если глагол в предложении, содержащем заявление, стоит в утвердительной форме, в кратком вопросе глагол стоит в отрицательной форме; если глагол в предложении, содержащем заявление, стоит в отрицательной форме, глагол в кратком вопросе стоит в

утвердительной форме.

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Example: The weather is nice today, isn’t it? (Погода прекрасная сегодня, не так ли?) He can’t swim, can he? (Он не умеет плавать, не так ли?).

1. This type of capital does not change its form in the course of production, ...?

4. The agricultural products are the form and the basis of trade and industry, ...?

a) aren’t they b) aren’t it c) are they

5. The entrepreneur must take the decisions: what to produce, how to produce, where to produce, ...?

Task 1. Translate these sentences into Russian.

1.Materials are changed into finished goods which are then exchanged for money and this in turn is used to buy more materials.

2.Like physical capital, human capital is important enough to be an indicator of economic development of a nation.

3.The supply of labour depends upon the size of population, geographic mobility, skills, education level (human capital), etc.

4.Labour has a variety of functions: production of raw materials, manufacturing of final products, transferring things from one place to another, management of production, and services like the ones rendered by physicians and teachers.

5.Аll aspects of economic life (i.e. agriculture, trade, industry) are generally influenced by natural resources called as «Land» in economics.

6.There must be a person or persons, who will organize these three factors so that production take place.

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