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Файл:Экономика. Понятия, принципы, проблемы. Учебное пособие
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The circular flow model implies a complex, interrelated web of
decision making and economic activity. Note that households and
businesses participate in both basic markets, but on different sides of each.
Businesses are on the buying or demand side of the resource markets, and
households, as resource owners and suppliers, are on the selling or supply
side. In the product market, these positions are reversed; households, as
consumers, are on the buying or demand side, and businesses are on the
selling or supply side. Each group of economic units both buys and sells.
To summarize: In a monetary economy, households, as resource
owners, sell their resources to businesses and, as consumers, spend the
money income received therefrom in buying goods and services. Businesses
must buy resources in order to produce goods and services; their finished
products are then sold to households in exchange for consumption
expenditures or, as businesses view it, revenues. The net result is a
counterclockwise real flow of economic resources and finished goods and
services, and a clockwise money flow of income and consumption
expenditures. These flows are simultaneous and repetitive.
RESOURCE
MARKET
BUSINESSES HOUSEHOLDS
PRODUCT
MARKET
Fig. 3.5. The circular flow of output and income
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2. Give English equivalents of the following Russian word
combinations. If you are not sure, find them in the text above.
модель кругооборота (продукта и дохода)
сделки
ресурсный рынок
находящиеся в их собственности
торгово-промышленные корпорации
поставлять ресурсы предприятиям
предъявлять спрос на ресурсы
взаимодействие спроса и предложения
огромное множество ресурсов
платежи
издержки предприятий
образовывать потоки заработной платы
рынок продуктов
иметь реальную стоимость
расходование денежного дохода
бесчисленное множество товаров
одновременно
определять цены продуктов
с точки зрения предприятий
сложное, взаимосвязанное переплетение
на стороне спроса
на стороне предложения
конечный результат
поток против часовой стрелки
поток по часовой стрелке
бесконечно повторяться
DISCUSSION
1. Without referring to the original diagram try to reconstruct
the counterclockwise and clockwise flows in Figure 3.6. The answers to
these questions will help you get deeper understanding of the topic
under consideration.
1. What are two basic types of markets?
2. In what type of market are the prices paid for the use of land, labor
and capital determined?
3. In what type of market are the prices of finished goods and
services determined?
4. What is the position of households in the product and resource
markets?
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5. What is the position of firms in the product and resource markets?
6. What are businesses’ payments for obtaining resources from the
viewpoint of households?
7. What determines prices in the product and resource markets?
8. How do households express their demand for a vast array of goods
and services?
9. What is households’ expenditure from the viewpoint of
businesses?
10. What does a circular flow model demonstrate?
?
BUSINESSES
HOUSEHOLDS
?
Fig. 3.6. The circular flow model of output and income
The prices paid for the use of land, labor, capital are determined in the
resource market shown in the upper loop. Businesses are on the demand
side and households on the supply side of this market. The prices of finished
goods and services are determined in the product market located in the
lower loop. Households are on the demand side and businesses on the
supply side of this market.
2. Read a newspaper article illustrating market shortage and
discuss the following.
Why didn’t the concert promoters set an equilibrium price?
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Can you explain the practice of “scalping” tickets for major pop music
and sporting events in terms of market shortages? How else might tickets be
distributed?
U2 FANS AND THE LONGEST FIVE DAYS
Last Wednesday night, a dozen people trudged to RFK Stadium and
slumped beneath ticket windows, eager for them to open. Five days later,
they did.
At 10 A.M. yesterday, $19 tickets for U2’s Sept. 20 concert at RFK
finally went on sale. There were 44,000 seats available. Three hours later,
there were none.
“These tickets went faster than any concert around here all summer,
and quicker than any I can remember, except for Springsteen in 1985,” said
Patti Pacak, spokeswoman for the RFK Stadium ticket office.
“The phones were ringing constantly, and the lines were real long, but
we weren’t surprised by the response. We knew it was going to be like this
when we saw a small group of people start lining up out here last
Wednesday night about 10 P.M.”
More than 46,000 people – 3,900 outside RFK – endured overnight
and weekend vigils at Ticket Center offices in metropolitan Washington,
Pacak said.
Washington Post, August 25, 1987.
3. Criticise this argument:
An increase in demand will cause an increase in price. This increase in
price will then cause a reduction in demand, until demand is reduced back
to its original level.
4. Choose the alternative and explain your point of view.
When a price of a good changes we say that this causes demand /
quantity demanded to change. This is shown by a shift in the demand curve /
a movement along the demand curve. When one of the other determinants
changes, however, we say that this causes the demand / quantity demanded
to change. This is shown by a shift in the demand curve / a movement along
the demand curve.
5. Analyse the situation.
A fish and chip shop finds that on Friday early evening, Saturday
lunch time and between 10.30 and 11.00 every evening it has queues out of
the door, whereas at other times it is empty. Would it be a good idea to
charge different prices at different times?
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WRITING
CAUSE AND EFFECT
In academic writing, events and actions are frequently linked with
their cause and effect. The diagram below summarises this relationship.
event
back in time
situation
or sequence
action
idea
cause
problem
reason
event
situation
action
idea
problem
forward in time or
sequence
effect
consequence
result
solution
Look at the examples of the cause and effect relationship.
Sometimes the cause is named before the effect; sometimes the effect is
named first.
Cause Connective Effect
Changes in the price of a good cause
quantity demanded to
change.
The demand has increased As a result
the prices are higher.
therefore
because of this
consequently
accordingly
hence, so
A shortage in workers leads to
a rise in their wages.
results in
produces
Effect connective Cause
Strikes are often caused by
by bad working
conditions.
The prices are higher due to
increases in demand.
because of
on account of
owing to
through
as a result of
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1. The parts of the sentences below have been mixed up. Join the
seven parts on the left with the correct parts from the ten on the right.
1. Prices fell. As a result …
2. Fewer services were provided
because of …
3. The supply curve shifted as a result
of …
4. The producers have offered for sale
more of their product because …
5. The shift of demand curve may be
caused by
6. A change in any supply shifters will
cause …
7. Consumers cannot eat or wear paper
money. Hence, …
a) the prices have considerably
rose.
b) through the expenditure of
money income, they express
their demand for goods and
services
c) an increase in prices.
d) more goods were sold.
e) the supply curve for a
product to move either to the
right or the left.
f) new technology
introduction.
g) changes in the number of
buyers.
h) fewer goods were sold.
i) changes in the number of
sellers.
k) a fall in prices.
2. Making use of the information in the correct answers from the
previous exercise, complete the following sentences. Inside the box
write the appropriate connective or verb marker.
1. The prices have considerably rose ____________.
2. Changes in the number of buyers ____________.
3. An increase in prices ____________________.
4. The introduction of new technology ___________.
5. More goods were sold ______________________.
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3. Look at this diagram relating to poverty. Write one or two
paragraphs describing some of the causes and effects of poverty in
Britain or another industrialized country that you know. In your
description include a definition of poverty.
POVERTY
SOME CAUSES
low wages
unemployment
death of the wage-earner
large families
illness
old age
alcohol
gambling
lack of education
government policies
inflation
war
natural disasters
(drought, famine, flood,
earthquake)
SOME EFECTS
inadequate, insufficient
or no –
accommodation
food
clothing
heating
opportunities
possessions or
comforts
Note: Causes may have multiple effects, and there can be a circular
relationship between cause and effect, e.g. unemployment ---> very little
money ---> few opportunities ---> alcohol ---> illness …
CHECKLIST TO UNIT 3
1. What is a market?
2. What are individual households in product and factor markets?
3. What are firms in product and factor markets?
4. What are two sides of each market transaction?
5. What does a rise in prices lead to?
6. What does a fall in prices result in?
7. What happens if supply exceeds demand in any market?
8. What happens if demand exceeds supply in any market?
9. How does a rise in prices affect quantity demanded and supplied?
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10. How does a fall in prices affect quantity demanded and supplied?
11. What are the determinants of market demand and supply?
12. What price is considered to be an equilibrium price?
13. How are deviations from equilibrium price adjusted in a free market?
14. How do price ceilings and floors affect the market?
15. Why does a demand curve slope downward?
16. What are the determinants of demand?
17. What happens to the demand curve when each of these
determinants changes?
18. Why does a supply curve slope upward?
19. What are the determinants of supply?
20. What happens to the supply curve when each of these
determinants changes?
21. When and where was the law of demand discovered ?
22. How did a French engineer and economist, Jules Dupuit, first
apply the theory of demand?
23. What was the contribution of Dionysius Lardner to the theoty of
demand and supply?
24. What do counterclockwise and clockwise flows in a circular flow
model designate?
GLOSSARY
acceptable adj.
alter v.
borough n.
charge v.
conceivable adj.
condominium n.
curtail v.
curve n.
crucial n.
determinant n.
deviation n.
distinction n.
expectation n.
equilibrium price n.
forbid (forbade,
forbidden) v.
приемлемый
изменять(ся), видоизменять(ся)
район
назначать цену, взимать
мыслимый, возможный
кондоминиум, совместное владение, при
котором каждый совладелец имеет право
распорядиться своей частью имущества
сокращать, урезать
кривая
ключевой, важный, решающий
детерминант, определяющий фактор
отклонение
различие, отличительная особенность
ожидание, вероятность
равновесная цена
запрещать, не позволять
78
impose v.
inferior (goods) adj.
instantaneous adj.
interaction n.
intermediary n.
intersect v.
measure v.
payroll n.
plot v.
plummet v.
push up v.
quarter n.
revenues n.
shortage n.
slash v.
slope v.
soar v.
stock exchange n.
substitution n.
surplus n.
technique n.
transaction n.
willing adj.
облагать, налагать, навязать (on, upon)
товары низкого качества
незамедлительный, мгновенный
взаимодействие
посредник
пересекать(ся)
измерять, соизмерять,
оценивать,
определять
платежная ведомость
чертить, вычерчивать кривую или
диаграмму
стремительно падать
увеличивать, повышать
квартал, квартира, группа людей
доходы
нехватка, недостаток, дефицит
срезать, уменьшать, сокращать
иметь наклон, опускаться или подниматься
наклонно
стремительно повышаться, подниматься
фондовая биржа
замещение
излишек, остаток
техника, технология, методика
дело, сделка
готовый, склонный, расположенный
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Unit 4
MARKET POWER
STARTING POINT
1. Do you know the main competitors in the world market in the
sectors presented below? List the companies under these headings,
adding to the names given.
sportswear: Reebok …………………………………………………
fashion: Versace …………………………………………………….
cars: Toyota …………………………………………………………
telecommunications: Telecom ……………………………………...
computers: IBM ……………………………………………………..
2. Name the two goods and services you buy from a monopolist.
Should the government regulate the price? Does it?
3. The global market is very competitive. What do you think
companies can do to persuade customers to buy their product instead
of another similar one?
READING
1. Skim the text about market power. Find an appropriate
heading for each paragraph:
a) reasons for monopolies;
b) monopoly;
c) antitrust policy;
d) Ford’s domination in the field of auto industry;
e) determinants of market power;
f) market power;
g) types of market structure.
1. In 1908 Ford produced the Model T, the car “designed for the
common man”. It was cheap, reliable, and as easy to drive as the horse and
buggy. Ford sold 10,000 Model T’s in its first full year of production. After
that, sales doubled every year. In 1913, nearly 200,000 Model T’s were sold
and Ford was fast changing American patterns of consumption, travel, and
living standards. During this early development of the U.S. auto industry,
Henry Ford dominated the field. There were other producers, but the Ford
Motor Company was the only producer of an inexpensive “motorcar for the
multitudes”. In this situation, Henry Ford could dictate the price and the
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