Vocabulary Focus

1. Provide appropriate English equivalents of the following collocations.

- бороться (конкурировать) за прибыль

- поддерживать промышленность

- природные ресурсы

- источник состояния

- правительственное регулирование

- производить те товары, которые нужны потребителям

- превзойти конкурентов

- предоставлять товары и услуги по самым низким ценам

- история экономических учений.

2. Fill in the prepositions, if necessary. Translate the sentences into Russian.

1. Free market system allows businesses to compete … profit with a minimum of government interference.

a) for b) with c) on

2. There are several reasons why I object … joining you.

a) with b) to c) -

3. The production of this equipment depends … demand.

a) in b) on c) at

4. Our company can provide goods or services … a low cost.

a) at b) on c) of

5. You will gain … no profit by resistance.

a) by b) in c) -

3. Use the vocabulary of the text to complete these sentences.

1. An individual who buys products or services for personal use and not for manufacture or resale is …

   1. a consumer

   2. a merchant

   3. an exporter

2. In economics, … is the amount of goods and services by a firm, industry, or country.

   1. trade

   2. output

   3. profit

3. A fundamental economic concept that describes the total amount of a specific good or service that is available to consumers is …

1. demand

2. supply

3. a law

4. Adam Smith saw the creation of … as the combination of materials, labor, land, and technology in such a way as to gain profit.

   1. costs

   2. society

   3. wealth

5. The Peugeot engine has … its competitors this season.

a) competed

b) benefited

c) outperformed

6. I didn’t want to … him or his company.

a) rival

b) compete

c) produce

Talking Points

1. Economic thought may be roughly divided into three phases:

• Premodern (Greek,Roman,Arab);

• Early modern (mercantilists, physiocrats);

• Modern (since Adam Smithin the late 18th century).

What new facts have you learnt about it from the text? Can you add anything else?

2. Comment on the quotation.

“Labor was the first price, the original purchase - money that was paid for all things. It was not by gold or by silver, but by labor, that all wealth of the world was originally purchased.” Adam Smith.

Summary Points

1. What is the basic topic of the text about first economists?

2. Draw up an outline of the text and give a one-sentence summary of each point.

3. Add some important information and make a conclusion: What have you learned from the text? Have you found it informative/ helpful/ interesting?

Supplementary reading Unit 1 Economics as a Science

The Business Cycle

The business cycle or trade cycle is a permanent feature of market economies: gross domestic product (GDP) fluctuates as booms and recessions succeed each other.

During a boom, an economy (or at least part of it) expands to the point where it’s working at full capacity, so that production, employment, prices, profits, investment and interest rates tend to rise.

During a recession, the demand for goods and services declines and the economy begins to work at below its potential. Investment, output, employment, profits, commodity, share prices and interest rates generally fall. A serious, long-lasting recession is called a depression or a slump.

The highest point on the business cycle is called a peak, which is followed by a downturn or a period of contraction. Economists sometimes describe contraction as “negative growth”.

The lowest point on the business cycle is called a trough, which is followed by a recovery or an upturn or a period of expansion.

There are various theories as to the cause of business cycle. Internal (or endogenous) theories consider it to be regular and indefinitely repeating. When economic times are good and people feel good about the future, they spend their money. If people are worried about the possibility of losing their jobs in the near future they tend to save more.

External (or exogenous) theories, on the contrary, look for causes outside economic activity: scientific advances, natural disasters, elections or political shocks, demographic changes, and so on.

Notes:

gross domestic product (GDP) – валовой внутренний продукт (ВВП)

fluctuate – колебаться, быть неустойчивым

recession – спад, снижение

downturn – экономический спад, понижение

upturn – подъём, рост

trough – самый низкий уровень экономической активности, низшая точка (цикла)

endogenous theory – эндогенная (внутренняя) теория

exogenous theory – экзогенная (внешняя) теория