satisfactorily, opportunity, distribution, independently, intermingled, intervention, environmentalism.

B. Word formation

Ex.4. Make up nouns as in the model.

Model: noun + suffix –ship →noun

e.g. owner – ownership

Citizen, dictator, friend, leader, member, proprietor, entrepreneur, master.

Model: verb +suffix –tion or –sion →noun

e.g.organize- organization

Protect, decide, define, produce, collect, reduce, consume, divide, cooperate.

Model: noun +suffix-ism →noun

e.g. material-materialism

Marx, Protestant, Buddha, commune, society, capital, consumer, perfection.

Ex.5. Make up adjectives as in the model.

Model: adjective +suffix -ance or -ence (- ancy, -ency) →noun

e.g.efficient - efficiency

Important, different, insistent, resistant, constant, efficient, intelligent.

Model: noun +suffix -ic →adjective

e.g. economy- economic

History, geography, hero, science, ballast, naturalist, metal, poet, myth.

What other noun or adjective suffixes do you know? Give examples.

Text a: types of economic systems

Active Vocabulary

To an economist, economic society presents itself as a mechanism for survival — a means whereby people are able to carry out the tasks of production and distribution. If we look at the different political and social structures which exist in the world today, and the way in which those systems have developed over the years, we are tempted to saythat people have made use of, and are making use of, very great varieties of economic sys­tems. In fact, in spite of the appearance of great variety, it is possible to group these different economic structures into four broad categories. These basic types of econom­ic organization are usually described as Traditional economies, Market economies, Command economies and Mixed economies. There are several basic and unfinished questions that must be answered in order to resolve the problems of economics satisfactorily. The scarcity problem, for example, requires answers to basic questions, such as: what to produce, how to produce it, and who gets what is produced. An economic system is a way of answering these basic questions. Different economic systems answer them in a different way.

Traditional Economic System

Theoldestanduntil recent times the most common way of solving economic problems was that of tradition. In traditional societies, people use methods of production and distribution that were devised in the distant past and which have become an accepted way of doing things by a long process of trial and error.

A traditional economic system is one in which people's economic roles are the same as those of their parents and grandparents. Societies that produce goods and services in traditional ways are found today in some parts of South America, Asia, and Africa. There, people living in an agricultural village still plant and harvest their own food on their own land. And the ways they produce clothing and shelter are almost exactly the same as those used in the past. Tradition decides what these people do for a living and how their work is performed. Traditional economy provides a sense of security and psychological comfort. Subsequently, there is a relatively low unemployment rate and low crime rate. A traditional economy allows for a greater degree of autonomy and little or no money is used.

 A traditional economy does not allow for much economic growth and development as changes are very slow and there is little social mobility. A traditional economy does not take advantage of technology and there is relatively little promotion of intellectualandscientificdevelopment. A traditional economy provides fewincentivesfor entrepreneurs, thus limiting choices forconsumersand loweringstandards of living.

Market Economic System

A market economic system is one in which a nation's economic decisions are the result of individual decisions by buyers and sellers in the marketplace. The market system of economic organization is also commonly described as a free enterprise or lais­sez-faire, or capitalist system. We shall use all these terms to stand for a market economy. Strictly speaking, the pure market of laissez-faire system has never existed. Whenever there has been some form of political organization, the political authority has exercised some economic functions (e.g. controlling prices or levying taxation). Efficiency is best achieved through a market economy where individual producers each make their own production decisions based on their own profit motive. Some critics of the free-market argue that property rights are in conflict with "human" rights. But the critics fail to realize that in a free-market system, every person has a property right over his own person and his own labor, and that he can make free contracts for those services.

The framework of a market or capitalist system contains six essential features. They are:

private property

freedom of choice and enterprise

self-interest as the dominating motive

competition

a reliance on the price system

a very limited role for government.