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worthy of a closer look.

“To get results in the marketplace, your focus must be on positioning your firm and differentiating your services from the competition”.

TAS KS

I.Answer the following questions:

1.What basic issues does marketing incorporate?

2.What propelled M icrosoft and Alcoa into the world-class arena and to the top of

their industries?

3.How does marketing work in a truly world-class organizations?

4.What are the two primary directions marketing operates in?

5.What is the key to surviving the politically and geographically fluid markets of tomorrow?

6.Why do companies such as M icrosoft and Alcoa have much in common?

7.How would you define marketing? Why?

8.Why do you think marketing is important to a company’s growth?

9.What is meant by “both are mavericks”?

II.Paraphrase the following statements:

1.M arketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy indi-

vidual and organizational objectives.

2.M arketing is a business function that often includes elements of sales, advertising, product development, research,pricing and other activities.

3.M arketing is any activity which supports the primary purpose of any organization.

prise.

III. Render the text in English:

Концепции руководства и организации изменяются со временем в зав и- симости от конкретных обстоятельств. Это также верно и для маркетинга. Развиваясь от простых операций обмена, служащих потребностям древних цивилизаций, до необычайно сложных процессов сегодня, основа обмена состоит в создании или прибавлении для покупателя. А что составляет ценность для покупателя, зачастую остается далеким от ясности. Существует несколько правил, которые помогают нам определять покупателей и бороться за них более эффек-

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тивно. Ценности определяются знаниями покупателей об экономии, технологии, конкурентных предложениях и опыте использования продукции компании.

IV. Give a summary of the text.

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CONS UMER CHOIC E

Economics is about scarcity, about social situations, which require that choices be made. The theory of consumer behavior deals with the way in which scarcity impinges upon the individual consumer and hence deals with the way in which such an individual makes choices. This consumer may, but need not be, an individual person. Families and households also make collective consumption choices on behalf of their members. The theory takes the consumer unit as given. It therefore presents us with an important instance of how social sciences, such as sociology and social psychology, which deal, in part, with the way in which people organize themselves into household and other units, could complement economics .

The theory of consumer choice has many applications. It enables us to deal with the selection of consumption patterns at a particular time and the allocation of consumption over time, and hence with saving. The individual supplying labor can be thought of as simultaneously choosing an amount of leisure time, so the same theory is relevant there as it is when we come to consider behavior in the face of risk. M oreover, in constructing a theory to deal with problems such as these, we are forced to think carefully and to define precisely, such much abused terms as “real income” and the “cost of living”, so that our theory gives us many valuable insights into matters of potentially considerable practical importance.

In order to derive the model of choice-making we need to describe first of all the logical structure of the choice problem which faces any consumer. We will find it helpful to think of that structure as being made up of three components. First, we must consider the items which the consumer finds desirable, the object of choice. Secondly, since the desirability of an object does not necessarily imply that it is available to be chosen, we must consider any limitations that might be placed on the alternatives available to the consumer, the constraints upon choice. Finally, because choice necessarily involves the process of selection among alternatives, we must consider the way in which the consumer ranks the alternatives available, the consumer’s tastes or preferences.

The objects of consumer’s choice are goods and services, yielding utility, which may be ordered and (in principal) measured. The consumer’s budget constraint shows how the upper limit on consumption (usually present disposable income) may be allocated among consumption patterns or goods at given prices. The

The social sciences, such as sociology and social psychology can compl i- ment the study of economics as they deal, in part, with the way in which people organize themselves into household and other units.

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position of the budget line is determined by income and price alone. Its slope reflects only relative prices.

Consumer tastes can be represented by a map of non-intersecting indifference curves. Alon g each indifference curve, utility is constant. Higher indifference curves are preferred to lower indifference curves. Since the consumer prefers more to less, indifference curves must slope downwards. To preserve a given level of utility, increases in the quantity of one good must be offset by reductions in the quantity of the good.

Indifference curves reflect the principle of a diminishing marginal rate of substitution. Their slope becomes flatter as we move along them to the right. To preserve utility, consumers will sacrifice ever smaller amounts of one good to obtain successive unit increases in the amount of the other good.

M aximizing consumer utility generates an equilibrium where the budget constraint and the highest possible indifference curve are t angential. At any point other that equilibrium, the consumer can substitute one good for another and increase utility. In equilibrium the marginal rate of substitution between goods is equal to their ratio of prices.

Income-consumption and price-consumption curves describe how the quantity demanded of a good alters with variations in income and price.

At constant prices, an increase in income leads to a parallel outward shift in the budget line. If goods are normal the quantity demanded will increase.

A change in the price of one good rotates the budget line around the point at which none of that good is purchased. Such a price change has an income effect and a substitution effect. The income effect of a price increase is to reduce the quantity demanded for all normal goods. The substitution effect, induced by relative price movements alone, leads consumers to substitute away from the good whose relative price has increased.

In a two-good world, a good whose quantity purchased moves together with the changes in the price of the other good is called substitute. That, whose quantity moves in opposite directions to the other good’s price change is a complement.

The Engel curve maps quantity demanded of one good against changes in income. The ratio of the marginal propensity to consume (slope of the Engel curve) to the average propensity to consume (ratio of quantity demanded to income) is known as the income elasticity of demand.

The demand curve relates quantity demanded of one good to its own price. The own price elasticity of demand is given by the slope of the demand curve (treating quantity as the dependent variable) divided by the ratio of quantity demanded to

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price. The cross elasticity of demand measures the proportional change in the quant i- ty demanded of one good to a proportional price of another.

Transfers in cash and kind. Cash transfers allow consumers to spend the e x- tra income in any way that they desire. Transfers in kind may limit the consumer’s option. Where they do, The increase in consumer utility will be less than under a cash transfer of the same monetary value. Yet transfers in kind are politically pop u- lar. The electorate wants to know that money raised in taxation is being wisely spent. Some who favor transfers in kind will argue that the poor really do not know how to spend their money wisely. One view says that people can best choose for themselves, whereas the other says that people may not act in their own best interests. This issue is not merely one of economics but also of philosophy, involving wider questions such as liberty and paternalism. In so far as people are capable of judging their own self-interest, economic analysis is clear: people will be better off, or at least no worse off, if they are given transfers in cash rather than in kind.

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TAS KS

I.Answer the following questions:

1.What does the theory of consumer goods enable us to do?

2.What are the components of the logical structure of the choice problem?

3.What is the difference between a substitute and a complement?

4.When do we have an income effect and a substitution effect?

5.How a given level of utility can be preserved?

6.How utility can be preserved?

II.Match the terms with their definitions:

III.Fill in the gaps:

1.The position of the budget curve is determined by … .

2.Consumer tastes can be represented by a map of … .

3.At constant prices, an increase in income leads to a parallel outward shift in … .

4.Income-consumption and … curves describe how the quantity demanded of a

good alters with variations in income and price.

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5.…may restrain the choices a consumer can make.

6.In equilibrium … substitution between goods is equal to their ratio of prices.

IV. Render the text in English:

В 19 веке многие экономисты были обескуражены следующей проблемой: почему цена воды, столь необходимой для жизни человека, настолько ниже цены алмазов, имеющих только декоративную функцию? Один простой ответ состоит в том, что алмазы редки, а вода находится в изобилии. Но такой ответ не может быть исчерпывающим, поскольку совокупная полезность, получаемая потребителями от использования воды, выше, чем от использования алмазов. Эта проблема решается в рамках концепции предельной полезности.

Потребители продолжают покупать товар до тех пор, пока отношение его предельной полезности к цене равно этому отношению для других благ. В пределе последний литр воды, который мы выпиваем, дает очень малое пр и- ращение полезности, тогда как в пределе последний алмаз, который некто покупает, как правило, делает его очень счастливым.

Чтобы как-то иначе представить суть проблемы, вообразите, что некто, имевший алмаз в один карат, умирает от жажды, и у него появилась возможность купить один литр воды за алмаз. М ожете быть уверены, что он с упоением совершил бы эту сделку, потому что в этих условиях предельная полезность воды была бы намного выше предельной полезности алмаза.

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Part II. Review Tests

TES T 1

(The S cience of Economics; Macroeconomics and Microeconomics; The Future of Economics; Economic S ystems: Two Important Distinctions)

I. Match the terms with their definitions:

II.Put the words in the correct order:

1.Restrictions, can, on, business, do, face, with, owners, they, cap ital, many, their, what.

2.Analysis, commodities, individual, with, decisions, microeconomic, deals, particular, about.

3.Science, of, extent, it, principles, a, economics, to, set, is, analytical, the, comprises, that, a.

4.Studies, every, for, theory, commodity, general, market, simultaneously, equili-

brium, every.

5.All, aggregate, we, purchases, discuss, of, behavior, total, the, can, households, and, production, to, firms, and.

6.Needs, it, prosperity, the, know, everyone, explains, to, framework, economics, of, some, because.

III. Fill in the gaps with the words or word combinations in italics:

Market forces, value, depression, business activity, planning, economists, welfare, inputs, economic growth, capitalist, consumer goods, national income, macroeconomics, publicly owned, management.

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1.The central problem of … in the second half of the twentieth century is the … of prosp erity to maximize individual … .

2.…look forward to a future where the stockpiling of … ceases to be the major preoccupation of people’s minds.

3.In former times, the free play of … was left to decide the level of …, and the rate of … .

4.M odern economics is the study of how … is determined, and how … relate to

each other in production.

5. The new economics can handle the cycles of … which caused such distress in the early years of the … system.

6. Even in countries with rigid state …, where large comp anies are …, those who can afford it can own a small business.

7. In the past economy tended to grow in spiral-like movements of … .

IV. Are the following statements true or false? Correct the false ones:

1.Capitalism can never exist with central planning.

2.The whole economy stands or falls by what is achieved for the individual.

3.The unique feature of economics is that it studies human behavior.

4.Economics shouldn’t be regarded as a set body of principles.

5. M acroeconomics in modern society is largely a study of government economics.

6.Controls over economic activity are likely to decrease in the future.

7.The outcome of any macroeconomic policy is always certain.

8.There is still disagreement about the nature and scope of economic inquiry.

9.Private ownership in a country and its reliance on free markets are equivalent features.

10.As a rule, microeconomists focus on one aspect of economic behavior in order to preserve the simplicity of the analysis.

V.Translate the following sentences into English:

1.Экономика, в отличие от родственных социальных наук, изучает поведение человека в условиях рынка.

2.Предметом макроэкономической теории является функционирование экономики, рассматриваемой как единое целое.

3.Экономика капитализма отнюдь не исключает государственного планирова-

ния.

4.М акроэкономическое равновесие представляет собой единственный ценовой уровень, при котором объем предлагаемой на рынке совокупной проду к- ции равен величине совокупного спроса.

5.Экономический рост – это долгосрочная тенденция увеличения реального

объема производства.

6.Такие ключевые вопросы, как место экономики в ряду других дисциплин, методы и масштабы экономического исследования и др., до сих пор вызывают оживленные споры.

7.Спад – исходная фаза экономического цикла, характеризующаяся снижени-

ем деловой активности, сокращением объемов производства и инвестиций, а также ростом безработицы.

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8.Различают два подхода к изучению совокупного предложения: классический (долгосрочный период) и кейнсианский (краткосрочный пер иод).

9.В определенной точке экономического цикла объемы производства достигают максимальных значений, после чего начинается их постепенное снижение, зачастую в результате государственного регулир ования.

10.В рамках микроэкономики рассматривается поведение и взаимодействие индивидов, домохозяйств, фирм и функционирование отдельных рынков.

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