MIXED ECONOMICS

Command and market economies both have significant faults. Partly because of this, an intermediate system has developed, known as mixed economies.

A mixed economy means very much what it says as it contains elements of both market and planned economies. At one extreme we have a command economy, which does not allow individuals to make economic decisions, at the other extreme we have a free market where individuals exercise considerable economic freedom of choice without any government restrictions. Between these two extremes lies a mixed economy. In mixed economies some resources are controlled by the government whilst others are used in response to the demands of consumers.

Technically, all the economies of the world are mixed: it is just the balance elements between market and planned elements that alters. Some countries are nearer to command economies, while others are closer to free market economies. So, for example, Hong Kong has some state-controlled industry, while Cuba has some privately owned and controlled firms.

The aim of mixed economies is to avoid the disadvantages of both systems while enjoying the benefits that they both offer. So, in a mixed economy the government and the private sector interact in solving economic problems. The state controls the share of the output through taxation and transfer payment and intervenes to supply essential items such as health, education and defence, while private firms produce cars, furniture, electrical items and similar, less essential product.

The U.K. is a mixed economy: some services are provided by the state (for example, health care and defence) whilst a range of privately owned businesses offer other goods and services. The Conservative Government under Margaret Thatcher switched many businesses from being state-owned and controlled to being privately owned as part of its privatisation programme. This has taken the U.K. economy further away from the planned system.

NOTES:

significant faults – значительные недостатки;

at one extreme … at the other extreme – на одном полюсе … на другом;

to exercise considerable economic freedom of choice – иметь значительную экономическую

свободу выбора;

restriction – ограничение;

to restrict – ограничивать (ся);

whilst – [wailst]

while – в то время как, пока;

state controlled industry - промышленность, контролируемая государством;

to avoid disadvantages – избегать недостатков;

to enjoy the benefits – иметь преимущества, пользоваться преимуществами;

to interact – взаимодействовать;

interaction - взаимодействие;

to solve economic problem – решать экономические проблемы;

a share of the output – доля в объёме производства;

essential items - товары и услуги первой необходимости;

a range of business – ряд компаний фирм.

COMPREHENSION QUESTIONS:

1. Are there really pure examples of planned and market economies in the world?
2. What’s a mixed economy?
3. What’s its aim?
4. What type of economy is the U.K.?
5. What type of economy is Russia now?
6. Why is the mixed economy considered to be the best type?

VOCABULARY EXERCISES:

Exercises 1. Suggest the Russian equivalents.

An intermediate system has developed; to supply essential items; the government controls a share of the output; to avoid the disadvantages of both systems; to enjoy the benefits; the government and the private sector interact in solving economic problems.

Exercise 2. Replace the underlined words by synonyms.

Significant faults; a range of products; whilst others are used in response to the demands of consumers.

Exercise 3. Fill in the gaps with the words and expressions from the text.

1. Command and market economies both have ____.
2. ____ contains elements of both market and planned economies. ____ we have a command economy, which does not ____, ____we have a free market where individuals ____ ____ without ____.
3. Some countries are ____ to command economies, while others are ____ to free market economies.
4. It is just ____ between market and planned element that ____ in all the economies of the world.
5. The aim of mixed economies is ____ the disadvantages of both systems while ____ the benefits that they both offer.
6. In a mixed economy the government and the private sector ____ in ____.
7. The state controls ____ through ____, and ____, and intervenes to supply ____.
8. The Conservative government switches many state owned businesses to being privately owned as part of its ____.

Exercise 4. Find in the text English equivalents for the following.

Избегать недостатков; частный сектор; налогообложение; централизованно принимать экономические решения; на одном полюсе..., на другом...; без ограничений; взаимодействовать в решении проблем; пользоваться благами; правительство, возглавляемое....

Exercise 5. Translate the sentences into English using all the active possible.

1) В реальной действительности экономические системы располагаются где-то между чисто рыночной и плановой экономикой.

2) Смешанная экономика – это система, при которой частная собственность и рынок, а также правительство и общественные институты, энергично участвующие в обеспечении экономической стабильности и перераспределении доходов, взаимодействуют в решении экономических проблем.

Exercise 6. Divide the text into logical parts and make up a plan.

Exercise 7. Retell the text using your own plan.

Exercise 8. Prove that mixed economy is better than planned and market economies.

Exercise 9. Make up bits of conversation using the formulas expressing presenting an argument.

а) for.

In view of the fact that...

Bearing in mind that...

Given that...

It’s worth noting /remembering that

It is a fact that...

– ввиду того, что...

– помня о том, что...

– исходя из того, что...

– cтоит отметить, вспомнить, что...

– это факт, что...

б) against.

However / Nevertheless...

On the other hand...

Despite this...

But we shouldn’t forget that...

But in spite of the fact that...

It has to be said that...

- однако (тем не менее)...

- с другой стороны...

- не смотря на это...

- но не следует забывать, что...

- но несмотря на тот факт, что...

- следует сказать, что...

Text B

Exercise 1. Read the text without using a dictionary and find sentences which are answers to following questions:

- How does market economy work?

- What country has a mixed economy today?

- What sectors is production carried out in a mixed economy by?

The pure market economy without any government control whatsoever, allocates products and resources in the most simplified manner. As to the command economy, practically speaking, it allows the government to act as a dictator.

Fortunately a community or a country does not have to make a complete choice between the two extreme: the market economy and the command economy. Instead it can compromise and have a mixed economy.

In a mixed economy thee quarters of production is carried out by the private sector through the market, though subject to varying degrees of government control. For the other quarter the government is directly responsible through the public sector. Thus the government influences the allocation of the goods and services produced.

Even in the U.S.A. a stronghold of free enterprise, it has been found necessary to control or regulate national income conditions.

As to Britain, today it has a mixed economy. In the public sector of British economic life are the nationalized industries like coal and steel, British Rail and British Overseas Airways Corporation (BOAC). In the private sector are the majority of the nation's industries, both large and small, from giants like Imperial Chemical Industries (ICI) and British Petroleum (BP) to small family businesses.

NOTES:

to allocate – размещать, выделить (суммы, ассигнования);

allocation – ассигнования;

to simplify – упрощать;

simple – простой;

to allow a discount – предоставить скидку;

to allow a claim – признать правильность претензии;

extreme – крайний, чрезвычайный;

subject to smth – при условии соблюдения чего-либо;

to be responsible for – отвечать за что-либо;

stronghold – оплот;

BOAC (British Overseas Airways Corporation) – Британская Компания трансокеанских

воздушных сообщений;

ICI (Imperial Chemical Industries) – крупнейший в Великобритании и Западной Европе

химический концерн;

BP (British Petroleum) – крупнейшая нефтяная компания;

Exercise 2. Describe thee types of economies in a very short way.

Lesson 7

Text A

MARKETS

A market is simply a mechanism which allows individuals or organization to trade with each other. Markets bring together buyers and sellers of goods and services. In some cases, such as a local fruit stall buyers and seller meet physically. In other cases such as the stock market business can be transacted over the telephone, almost by remote control. There’s no need to go into these details. Instead, we use a general definition of markets.

A market is a shorthand expression for the process by which household’s decisions about consumption of alternative goods, firms’ decisions about what and how to produce and workers’ decisions about how much and for whom to work are all reconciled by adjustment of prices.

Prices of good and of resources such as labour, machinery and land adjust to ensure that scarce resources are used to produce those goods and services that society demands.

Much of economics is devoted to the study of how markets and prices enable society to solve the problems of what, how and for whom to produce. Suppose, you buy a hamburger for your lunch. What does this have to do with markets and prices? You chose the cafe because it was fast, convenient and cheap. Given your desire to eat and your limited resources, the low hamburger price told you that this was a good way to satisfy your appetite. You probably prefer steak but that is more expensive. The price of steak is high enough to ensure that society answers the “for whom” question about lunchtime steaks in favour of someone else. Now think about the seller’s viewpoint. The cafe owner is in business because given the price of hamburger meat, the rent and the wages that must be paid, it is still possible to sell hamburger at a profit. If rents were higher, it might be more profitable to sell hamburgers in a cheaper area or to switch to luxury lunches for rich executives on expense accounts. The student behind the counter is working there because it is a suitable part-time job which pays a bit of money. If the wage were much lower it could hardly be worth working at all. Conversely, the job is unskilled and there are plenty of students looking for such work, so owners of cafes do not have to offer very high wages.

Prices are guiding your decision to buy a hamburger the owner’s decision to sell hamburgers and the student’s decision to take the job. Society is allocating resources - meat, buildings and labour - into hamburger production through the price system. If nobody likes hamburgers, the owner could not sell enough at a price that covered the cost of running the cafe and society would devote no resources to hamburger production. People’s desire to eat hamburgers guided the resources into hamburger production. However, if the economy’s ability to produce meat products reduced, competition to purchase more scarce supplies of beef would bid up the price of beef, hamburger producers would be forced to raise prices and consumers would buy more cheese sandwiches for lunch. Adjustments in prices would encourage society to reallocate resources.

There were several markets involved in your purchase of a hamburger. You and the cafe owner were part of the market for lunches. The student behind the counter was part of the local labour market. The cafe owner was part of the local wholesale meat market and the local market for rented buildings. These descriptions of markets are not very precise. That is why we have adopted a very general definition of markets, which emphasises that they are arrangements through which prices influence the allocation of scarce resources.

NOTES:

to bear in mind - иметь ввиду;

to keep in mind - /- / -

a local fruit stall - фруктовый ларек;

stock market - фондовая биржа, рынок акций;

to transact business - совершать сделку;

to make a deal - / -/ -

by remote control - при помощи дистанционного управления;

to go into details - вдаваться в подробности;

a general definition - общее определение;

a shorthand expression - краткое выражение (определение);

households decisions - решения домохозяйств;

to reconcile - приводить в соответствие, согласовывать;

by adjustment of prices - посредством корректировки цен;

to demand – требовать;

given, taking into account (consideration) - при условии, что..., учитывая;

to answer the question in favour of smb. - решать вопрос в пользу кого-либо;

the seller’s viewpoint - точка зрения продавца;

the rent - арендная плата;

to switch to luxury lunches - переключиться на дорогие обеды;

rich executives - состоятельные служащие;

behind the counter - за прилавком;

suitable – подходящий;

to suit – подходить;

part-time job - работа с неполной занятостью;

full-time job - работа с полной занятостью;

bid up the price - набавлять цену;

a bit of money - немного денег;

it should hardly be worth working at all - вряд ли вообще имеет смысл работать;

conversely - наоборот, напротив;

on the opposite -/-/-

on the contrary -/-/-

unskilled job - неквалифицированная работа;

to guide one’s decision - влиять на чье-либо решение;

to cover the cost - покрывать расходы;

to run the cafe - содержать кафе;

to devote resources - выделять ресурсы;

to guide resources into hamburger production - направить ресурсы на производство

гамбургеров;

to reduce the economy’s ability - cнижать возможности экономики;

to purchase scarce supplies - скупать дефицитные ресурсы;

to reallocate resources - перераспределять ресурсы;

to be involed in - быть задействованным в;

the local labour market - локальный рынок труда;

the local wholesale market - локальный оптовый рынок

the local market for rented buildings - локальный рынок аренды помещений;

to emphasize - подчеркнуть, выделить;

arrangements through which prices influence smth. – структуры (механизмы) посредством

которых цены влияют на что-либо;

COMPREHENSION QUESTIONS:

1. What example is given of a market where sellers and buyers actually meet?
2. Why do prices adjust?
3. What problems do markets and prices solve for society?
4. Why is the cafe owner in business?
5. Why don’t cafe owners have to pay high wages?
6. What makes society put resources into hamburger production?
7. What would consumers do if hamburger prices rose?
8. Enumerate all the components comprising the concept of “Market”.
9. In what way can prices guide your decision to buy some goods?
10. In what way can prices guide a person’s decision to take a job?

VOCABULARY EXERCISES:

Exercise 1. Suggest the Russin equivalents.

To bear in mind; the way the market works; a shorthand expression; to be reconciled by adjustment of smth.; a suitable part-time job; to offer high wages; to guide smb’s decision; to cover the cost of smth.

Exercise 2. Replace the following words by synonyms:

At a distance; carried out; done; ask for; make certain that; buy; managing; put up; rareness.

Exercise 3. Fill in the gaps with the words and expressions from the text.

1. Markets bring together ___ and ___ of goods and services.
2. Prices of good and of resources such as ___, ___ and ___ adjust to ensure that ___ ___are used to produce those goods and services that society demands.
3. Much of economics is devoted to the study of how ___ and ___ enable society to solve the problems of what, how and for whom to produce.
4. Prices ___ your decision to buy a hamburger, the owner’s decision to sell hamburgers and the student’s decision to take the job.
5. Society ___ resources - meat, buildings and labour - into hamburger production through the price system.
6. ___ in prices would encourage society to ___ resources.
7. There were several markets involved in your ___ of a hamburger.
8. You and the cafe owner were ___.

Exercise 4. Find in the text English equivalents for the following;

Поведение рынка; рынок ценных бумаг; проводить сделку, операцию; иметь что-то общее с чем-либо; с учетом чего-либо (принимая во внимание); в пользу кого-либо другого; прибыльно продавать; переключиться на что-либо; неквалифицированная работа;

распределять ресурсы посредством системы цен; сокращать возможности экономики; набавлять цену; перераспределять расходы; оптовый рынок; механизмы (структуры), посредством которых цены влияют на распределение.

Exercise 5. Translate the sentences using all the active possible:

1) Рынок ценных бумаг, как и любой рынок, вообще, где совершаются сделки, представляет собой механизм (структуру), посредством которого цены регулируют распределение ограниченных ресурсов в обществе.

2) Потребности различных групп общества приводятся в соответствие путем изменения (регулирования) цен на товары и ресурсы - труд, капитал (оборудование), землю.

3) Ваше решение о покупке на ленч гамбургера имеет непосредственное отношение к вопросу о рынках и ценах, поскольку, к примеру, повышение цен на мясо и, соответственно, переключение продавцов-владельцев кафе на более дорогие обеды может привести к тому, что вопрос «для кого производить» будет решаться в пользу других, более богатых потребителей.

4) Многие студенты ищут работу в кафе, поскольку она занимает у них лишь часть времени и не требует квалификации, несмотря на то, что владельцы кафе предлагают невысокую плату за такой труд.

5) Если бы возможности экономики по производству мясопродуктов сократились, цена на мясо возросла бы, и покупатели стали бы покупать сандвичи с сыром, то есть корректировка цен побудила бы общество к перераспределению ресурсов.

Exercise 6. Divide the text into logical parts and make up a plan of your own.

Exercise 7. Give a summary of the text, using words and expressions from Lesson 2, ex. 7.

Exercise 8. Make up bits of conversation using the following formulas expressing:

a) making an offer

1. We have pleasure in offering you...

2. We are pleased to inform you...

- мы с удовольствием предлагаем Вам...

- с удовлетвореним сообщаем Вам...

b) rejecting an offer

1. We regret to inform you...

2. Owing to unforseen circomstances beyond our control, we have been obliged to

3. In view of the fact that...

- с сожалением сообщаем Вам...

- в силу непредвиденных обстоятельств, неподвластных нам, мы были вынуждены

- ввиду того, что...

Text B

Exercise 1. Read the text without using a dictionary and answer the following questions:

1. When do you think this item was published?

2. Have you heard anything about Hellenic Bottling Company before you read this item?

3. Who produces Coca-Cola sold in Russia?

4. Can you give any other names of franchise-holders in Russia or other countries?

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