Lesson 2 (Supplement)

Vocabulary study

1. The italicized words in the sentences below are found in the lesson to come. Study the sentences, identify the part of speech and write your own definition for the word on the line provided.

Example. He acquired his wealth in the steel industry. Acquire (verb) gain possession of.

1) The government will allocate more of its budget to health care. Allocate …………………

2) An alternative to putting one’s savings into a bank is investing in stocks and bonds. Alternative ............................

3) A high tax was placed upon luxury commodities. Commodities ...........................................

4) Consumption of alcohol seems to decline during late middle-age. Consumption ...................

5) The government enacted a law to control the sales of guns. Enact .......................................

6) After Mary lost her job, she had to forego some of the luxuries she had grown accustomed to. Forego .............................

7) When bad weather is threatening, people tend to hoard food because they are afraid the supermarkets will be unable to get in new supplies. Hoard .................... , supply ....................

8) As an added incentive, the car dealer offered a special service agreement. Incentive .............

9) The teacher’s intervention prevented the two boys from getting into a fight. Intervention..................

10) They optimized their profits by reinvesting them in the company. Optimize .......................

11) The telephone company is promoting a new service for is customers. Promote ..................

12) Since the floods last summer, there has been a scarcity of grain products on the market. Scarcity ..................................

2. In each set of words, cross out the word that does not have a similar meaning to the first

1. acquire 2. allocate 3. alternative 4. commodity 5. consumption 6. enact 7. forego 8. hoard 9. incentive 10. intervention 11. optimize 12. promote 13. scarcity

get assign change item manufacture of items establish precede accumulate encouragement familiarity make efficient publicize gap

obtain attract option market purchase of items represent renounce exchange occurrence imposition make necessary obstruct lack

question set aside possibility product use of items specify sacrifice save stimulus interference make useful advocate terror

Economic Considerations

LESSON 4. The aim of the lesson is to make you feel more confident while talking about economic issues and matters of the kind. We are gradually moving towards learning to act as interpreters whose job it is to understand and interpret for various purposes.

1. Read the excerpt form the documentary “Tourist Attraction” and formulate its main idea:

We live in a consumer-oriented society, what that means is this: we must buy everything that our factories and our businesses produce. If we don’t, the businesses and the factories will close down. Here’s the problem: how do you get people who already have everything they need to buy huge quantities of goods that they don’t need?

I mean, it sounds weird when you say it, but the people who have money have everything they need in order to keep the system going. If you don’t believe me try it at Christmas. Your biggest problem at Christmas is not, “where am I going to get money to buy presents for my friends and loved ones?” That’s not the problem, you’ll have the money. The problem is this: “what do I buy for people who have everything?” It never occurs to us to say, “nothing”. But we are people who have everything and this Christmas you’re going to wander up and down the isles of department stores, hoping that since last year somebody has invented something that you don’t need in order that you can buy it for the person who has everything.

2. Fit each key concept to its definition and think of the Russian equivalent:

Scarcity Economic goods Economic services Economic indicators Inflation Standard of living Consumption Consumer price index Gross national product

- purchases of goods and services by households and businesses. - price indexes, production levels, employment figures and other statistics showing the status of some aspect of economy. - activities of people that have a market value. - the level of subsistence of a nation, group, or individual, with reference to needs and costs. - a persistent and significant increase in the price of goods and services. - the average price of a “market basket” of a large variety of consumer goods and services which reflects the general cost of living. - material objects that have value in the market place. - total market value of all goods and services produced in one year. - an inadequate supply of goods in relation to the population’s needs and desires.

Now give the English for: потребление, дефицит, экономические показатели, статистика цен, уровень жизни, показатели занятости, валовой национальный продукт, потребительская корзина, спрос и предложение.

3. Translate into English, express your agreement or disagreement and add a sentence of comment:

* Спад в экономике всегда вызывает политическую нестабильность в обществе........

* Существует распространенное мнение, что неудачные попытки обуздать экономический спад в условиях смены экономических отношений серьезным образом угрожают демократическим преобразованиям..............................

* Уровень жизни людей в нашей стране упал всего лишь до уровня конца 60-х годов.........

* Вся беда в том, что наши предприниматели не понимают связь между спросом и предложением................................

* Распределение товаров и услуг во времена плановой экономики было просто великолепным, что и предотвращало ситуации дефицита на те или иные товары и услуги....................................

* Было не разумно начинать приватизацию сотен государственных предприятий, создав, таким образом, новый класс предпринимателей..............................

4. In a free enterprise system, the goal is for individual business and firms to operate as freely as possible, with as few restraints from government as possible. This private sector of the economy produces goods and services for profit. There are activities that the private sector does not undertake, because they are unprofitable or require too much capital. These tasks are performed by the public sector. It is a continuing debate as to which activities should be handled by the public and the private sectors.

Give your definition of each sector. Which enterprises should be run by the public sector and which - by the private one? (Health care, building roads, running a postal service, running a shop, a restaurant, a museum, a cinema, a park, maintaining the army, railroads, television, etc.)

5. Americans traditionally focus on their earnings as an indicator of relative standard of living. They compare their wages with others, and they measure their changing prospects by looking at rises in salary and comparing their earnings with what they were in the years past. This emphasis on income may fail to indicate accurately how their economic life is progressing in terms of their true standard of living, or quality of life. One may receive a substantial rise in salary, but, if the cost of living rises at a greater rate because of inflation, a person may be worse off economically than before. On the other hand, a modest rise in one’s income may prove to be significant if the costs of the items we need or want decline or, at least, do not rise.

Why are government officials and economists so concerned with the cost of living? Do rises in income keep step with the inflation in Russia today?

6. The consumer price index (CPI) is calculated periodically to keep tabs on the changing cost of living. The total group of items is divided into categories: food, housing, transportation, medical care, etc. - all in all about 400 items. Since food is so important in a family's cost of living, a CPI on a hypothetical "market basket" of typical food purchases is regularly announced. The CPI and how it is circulated become involved in much political controversy. Political leaders in office do not like to see the CPI rise considerably during their term because voters will blame them for inflation and vote them out of office.

Explain what the consumer price index is and why it causes controversy. What items should or shouldn’t be inclined into the “market basket”?

7. a) Scan the article “Opportunity costs” to define the following terms: opportunity costs, money cost, production cost, foregone earnings. Compare your definitions with a partner. Then share them with the whole class.

b) Read the article carefully and complete the discussion questions that follow below in groups of three or four:

1) Having read the article carefully, look at the definition you wrote earlier for opportunity cost. If you are not completely satisfied with that definition, write another at this time.

2) What was the opportunity cost of your last major purchase? What was the opportunity cost of a decision you made to spend your time a particular way.

3) What is the opportunity cost involved in a decision to continue schooling after graduation from school?

4) What was the opportunity cost involved in a decision to forego schooling in favor of entering the world of work immediately after graduating from school?

5) The firm referred to in the last two paragraphs of the reading estimated that it would have to invest US$ 500, 000 in order to produce microwave ovens. Production costs would add another US$ 200, 000 annually. The firm estimates that it could sell about US$ 225, 000 worth of ovens each year. Would it be wise for the firm to manufacture the microwave ovens? Explain your answer.