4.3 Прочитайте текст и определите, относятся ли данные утверждения к Веблену (V), Найту (k), или к обоим (b).

1. Supported laissez faire economics. K

2. Taught Economics at the University of Chicago.B

3. Predicted the separation of ownership from management of business organizations. V

4. Coined the term “leisure class”. V

5. Believed business profits were earned in return for accepting the uncertainties of the market. K

6. Opposed laissez faire economics. V

7. Believed consumers made unwise choices.V

8. Supported the consumer’s right to determine what should be on the market. K

9) Believed that people in business could gain profits by giving consumers

what they wanted. K

10) Believed that people in business could gain profits by limiting production. ?K

11) His ideas are still influential today. B

4.4 Дополните таблицу глаголами, существительными и прилагательными.

Verb	Noun	Adjective
1) consume	___consumer___ __consumption___
2) __compete___	Competition ___competitor___	___competitive__
3) produce	___producer___ ___production___	___productive___
4) ___manufacture__	Manufacturer
5)	___certainty___ __uncertainty____	Certain
6)	Reason	__reasonable__

4.5 Дополните фразы из текста данными словами.

basic, social, class, decisions, free, loss, consumer, wasted, demanded

1. __ social _____ behavior

2. unwise __ decisions ______

3. leisure ___ class _____

4. quantity __ demanded ______

5. __ wasted_____ resources

6. __ basic _____ necessities

7. __free _____ enterprise

8. financial _ loss ______

9. _ consumer _____ demand

4.6 Дайте развернутые ответы на вопросы в письменной форме.

1. What did Veblen mean by “conspicuous consumption”? Consider whether it is a factor in today’s economy. Provide evidence to support your opinion.

He coined the term conspicuous consumption to describe the tendency of the ‘leisure class’ (the wealthy) to buy goods and services simply to impress others. This, in turn, led middle class consumers, and even the poor, to imitate the wealthy by buying goods for similar purposes. When that occurred, it was possible for the law of demand to be reversed. Quantity demanded increased at a high price rather than at a low one. In my opinion, this phenomenon is extremely relevant for today. All advertising campaigns are based on its rules. For example, now a lot of people take in credit the things that they cannot afford for the sake of conspicuous consumption.

2. What distinction did Knight make between risk and uncertainty? Consider how a business might limit risk or uncertainty and prevent financial loss.

He distinguished between risk (which can be predicted and against which one can be insured) and the uncertainty of events that cannot be predicted. Everyone, for example, faces the risk of illness and can be insured against it. The inescapable punishment of financial loss awaited those firms who failed to meet the market’s demands. Those manufacturers who guess correctly are entitled to the rewards they earn. Meanwhile, those who produced the wrong style or color will be motivated to do better next season or face ruin.

UNIT 5