- •Business issues Проблемы бизнеса
- •Contents
- •Введение
- •Part I. Bisiness chapter I. Management key vocabulary
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English terms and their Russian equivalents. Give your own sentences with them
- •III. Read the following verbs and verbal phrases and pay attention to the prepositions used after them
- •IV. Listen, read and translate the text management
- •Grammar practice
- •Language practice
- •IX. Translate the following sentences into English
- •X. Answer the questions about the text
- •XI. Find in the dictionary the definitions of the synonyms with the meaning of «управлять, руководить»
- •XII. Read the text and divide it into some meaningful parts, giving the proper title to each of them general concept on management
- •XIII. Write a summary of the text
- •XV. Work in groups of two or three, talk about management
- •Chapter 2. Marketing key vocabulary
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English terms and their Russian equivalents. Give your own sentences with them
- •III. Read the following verbs and verbal phrases and pay attention to the prepositions used after them
- •IV. Listen, read and translate the text marketing
- •Grammar practice
- •V. Find in the text four sentences of at least two different tenses in the Active Voice, copy them into your exercise books, give simple grammar analysis of these sentences
- •Language practice
- •VI. Look through the text to find the English equivalents of the following terms and give the sentences with them
- •VII. Find in the text the sentences that correspond to the following statements
- •VIII. Translate the following sentences into English
- •IX. Answer the questions about the text
- •X. Find in the dictionary the definitions of the synonyms with the meaning of «прибыль, доход»
- •XI. Read the text and divide it into some meaningful parts, giving the proper title to each of them
- •XII. Write a summary of the text
- •Speaking
- •XIII. Practice talking about the following situations
- •XIV. Work in pairs of two or three and talk about marketing
- •Chapter 3. Types of enterprises section 3.1. Concept of small business key vocabulary
- •Small business
- •Grammar practice
- •V. Find in the text four sentences of at least two different tenses in the Passive Voice, copy them into your exercise books, give simple grammar analysis of these sentences. Language practice
- •VI. Look through the text to find the English equivalents of the following terms and give the sentences with them
- •VII. Find in the text the sentences that correspond to the following statements
- •VIII. Translate the following sentences into English
- •IX. Answer the questions to the text
- •X. Find in the dictionary the definition of the synonyms with the meaning of:
- •XI. Read the text and divide it into some meaningful parts giving the proper title to each of them which is better – to buy an existing firm or start
- •X II. Write a summary of the text
- •Speaking
- •XIII. Practice talking about the following situations
- •Section 3.2. Different types of business: sole proprietorship and partnership key vocabulary
- •Read and remember the pronunciation the following words
- •II. Read and translate the following groups of words
- •III. Remember the words given
- •IV. Define the part of speech of the following words
- •V. Make nouns of these verbs
- •VI. Listen, read and translate the text sole proprietor
- •Grammar practice
- •VII. Find in the text two sentences in the Passive Voice, copy them into your exercise books, give simple grammar analysis of these sentences.
- •VIII. Find in the text sentences with the Infinitive and define its form and function. See Grammar in Use section if necessary. Language practice
- •IX. Fill in the blanks using the words given below:
- •X. Match the synonyms
- •XI. Match the antonyms
- •XII. Make up antonyms of the words given using proper prefixes
- •XIV. Make up sentences using the following words
- •XVI. Put questions to the words in italics
- •XVII. Put the verbs in brackets into the correct form
- •XVIII. Answer the following questions
- •XIX. Read and translate the text and define the advantages and drawbacks of the business organization in question partnership
- •Speaking
- •Section 3.3. Joint stock company key vocabulary
- •III. Listen, read and translate the text joint stock company
- •Grammar practice
- •Language practice
- •Speaking
- •Section 3.4. Joint venture key vocabulary
- •III. Read the following verbs and verbal phrases and pay attention to the prepositions used after them
- •IV. Listen, read and translate the text joint venture
- •Introduction
- •Market study
- •Initial representation
- •Further discussions
- •Choice of partners
- •Local management
- •Partnership
- •Financial considerations
- •Legal and other fees
- •Grammar practice
- •V. Find in the text sentences in the Active Voice, copy them into your exercise books, give simple grammar analysis of these sentences.
- •VI. Find in the text sentences with the Infinitives and define their forms and functions. See Grammar in Use section if necessary. Language practice
- •VII. Look through the text to find the English equivalents of the following Russian terms and give the sentences with them
- •VIII. Find in the text the sentences that correspond to the following statements
- •IX. Translate the following sentences into English
- •X. Answer the questions about the text
- •XI. Find in the dictionary the definitions of the synonyms with the meaning of «заем»
- •XII. Read the text and divide it into some meaningful parts, giving the proper title to each of them transfer of technology
- •XIII. Write a summary of the text
- •XIV. Reproduce the main text using the words given in Exercises I, II, III.
- •XV. Practice talking about the following situations
- •XVI. Work in groups of two or three, talk about joint venture activity
- •Section 3.5. Business planning key vocabulary
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English terms and their Russian equivalents. Give your own sentences with them
- •III. Remember the following word combinations
- •IV. Listen, read and translate the text business planning
- •Grammar practice
- •Language practice
- •X. Translate the following sentences into English
- •XI. Answer the questions about the text
- •XII. Find in the dictionary the definitions of the synonyms with the meaning of «расход, издержки»
- •XIII. Read the text and divide it into some meaningful parts, giving the proper title to each of them the stages of a business
- •XIV. Write a summary of the text according to the following plan
- •Speaking
- •XV. Reproduce the main text using the words given in exercises I, II, III.
- •XVI. Practice talking about
- •Chapter 4. Banks and money section 4.1. Money key vocabulary
- •I. Remember the correct pronunciation of these words
- •II. Read and translate the following groups of words
- •III. Remember the words and word combinations given
- •IV. Define the part of speech
- •V. Make nouns of the following verbs
- •VI. Listen, read and translate the text money and its functions
- •The functions of money
- •Grammar practice
- •Language practice
- •XVII. Fill in the gaps with proper prepositions
- •XVIII. Make questions to the words in italics
- •XIX. Fill in the gaps using the verbs given in brackets
- •Speaking
- •XX. Answer the following questions. Give the examples to describe your opinion
- •XXI. Work in pairs. Discuss the importance of this or that form of money.
- •XXII. Work in small groups
- •Regulation and token money
- •Section 4.2. Banking and financing key vocabulary
- •III. Read the following verbal phrases and pay attention to the prepositions used after them
- •IV. Listen, read and translate the text the commercial banks
- •Grammar practice
- •Language practice
- •IX. Translate the following sentences into English
- •Speaking
- •Financing of international trade
- •The foreign exchange market
- •XIV. Write a summary of the text
- •XV. Practice talking about the following situations
- •XVI. Work in groups of two or three, talk about banking and payment
- •Section 4.3. Inflation key vocabulary
- •I. Read the words below and remember the correct pronunciation of them
- •II. Read and translate the following groups of words
- •III. Remember the words and word combinations given
- •IV. Define the part of speech of the following words
- •V. Make nouns of the following verbs
- •VI. Listen, read and translate the text types of inflation
- •Grammar practice
- •Language practice
- •XVIII. Put prepositions into the blanks
- •XIX. Put question to the words in italics
- •XX. Fill in the blanks using the necessary forms of the verbs given in brackets
- •Speaking
- •XXI. Work in pairs. Student a asks questions, student b answers them
- •XXIII. Read and translate the text the effects of inflation
- •Chapter 5. Fairs and exhibitions key vocabulary
- •Fairs and exhibitions
- •Grammar practice
- •Language practice
- •X. Translate the following sentences into English
- •XI. Answer the questions about the text
- •XII. Find in the dictionary the definitions of the following synonyms with the meaning of «показ; демонстрация»
- •XIII. Read the text and divide it into some meaningful parts giving the proper title to each of them rules and regulations
- •XIV. Write a summary of the text with to the following phrases
- •Speaking
- •XV. Reproduce the main text, using the words given in exercises I, II, III.
- •XVI. Practice talking about the folloving situations
- •XVII. Work in groups of two or three, talk about your firm's participation in the exhibition, using the information about conditions of participation
- •Chapter 6. Business contacts key vocabulaty
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English word combinations and their Russian equivalents. Give your own sentences with them
- •III. Read the following verbal phrases and lexical combinations and pay attention to the prepositions used after them
- •Listen, read and translate the text business contacts
- •Grammar practice
- •Language practice
- •XI. Translate the following sentences into English
- •XII. Answer the questions about the text
- •XIII. Find in the dictionary the definitions of the synonyms with the meaning of «договоренность»
- •XIV. Read the text, divide it into some meaningful parts giving the proper title to each of them kioge-97 – the 5th kazakhstan international oil and gas exhibitions
- •XV. Write a summary of the text with the following phrases
- •Speaking
- •XVI. Reproduce the main text, using the words given in exercises I, II, III.
- •XVII. Work in groups of two or three, talk about business matters
- •XVIII. Practice talking about:
- •Chapter 7. Contracts and agreements key vocabulaty
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English terms and their Russian equivalents. Give your sentences with them
- •III. Read the following verbs and pay attention to the prepositions used after them
- •Listen, read and translate the text
- •Languge practice
- •V. Look through the text to find English equivalents of the following terms and give your sentences with them
- •VI. Find in the text the sentences that correspond to the following statements
- •VII. Translate the following sentences into English
- •VIII. Answer these questions about the text
- •IX. Find in the dictionary the definitions of the synonyms with the meaning of
- •X. Read the text and divide it into some meaningful parts, giving the proper title to each of them
- •Articles
- •XI. Write a summary of the text
- •Speaking
- •XII. Reproduce the main text, using the words given in exercises I, II, III.
- •XIII. Work in groups of two or three, talk about contracts and agreements
- •XIV. Practise talking about:
- •Chapter 8. Business letters key vocabulaty
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English words and phrases and their Russian equivalents. Give your sentences with them
- •III. Listen, read and translate the text business letter
- •Language practice
- •VIII. Translate the following sentences into English
- •IX. Answer the questions about the text
- •X. Study the contents of business letters
- •XI. Find in the dictionary the definitions of the synonyms with the meaning of «удобство»
- •XII. Read the text, divide it into some meaningful parts giving the proper title to each of them
- •X III. Write a summary of the text
- •XIV. Read and learn the registration form, the application for accommodation, the layout of the letter, the order form for catalogue and some samples of letters Registration Form
- •Accommodation
- •The layout of the letter
- •The Samples of Letter
- •2. Text of entry 2. Текст
- •XVI. Write the letters using the samples given in exercise хv
- •XVII. Reproduce the main text
- •I. Read and remember the words given
- •Individual and society
- •Grammar practice
- •Language practice
- •XII. Fill in the blanks with prepositions
- •XIII. Fill in the gaps with the verbs given in brackets
- •XIV. Response on the following
- •XV. Make up questions to the following sentences
- •XVI. Translate from Russian into English
- •Speaking
- •Section 1.2. Scarcity and choice key vocabulaty
- •Read and translate the groups of words given
- •III. Listen, read and translate the text scarcity and choice
- •Grammar practice
- •Language practice
- •X. Fill in the gaps
- •XI. Join the sentence halves below
- •XII. Answer the question below
- •XIII. Translate from Russian into English
- •The role of the market
- •Grammar practice
- •Language practice
- •XVI. Fill in the blanks with the correct forms of the verbs given in brackets
- •XVII. Answer the questions
- •XVIII. Translate from Russian into English
- •Speaking
- •XIX. Work in pairs or small groups. Think of the example of any seller and prove that it is profitable for him to be in the business.
- •XX. Making a report. Make a report on the role of the market. Use simple language
- •Section 2.2. The command economy, the free market economy and the mixed economy key vocabulaty
- •I. Read and remember the following words
- •II. Translate and remember the following word combinations
- •III. Find the English equivalents to the following word expressions
- •IV. Listen, read and translate the text the command economy, the free market economy, the mixed economy
- •Grammar practice
- •Language practice
- •IX. Answer the questions
- •X. Translate from Russian into English
- •Speaking
- •Chapter 3. Macroeconomics and microeconomics section 3.1. What is macroeconomics? key vocabulaty
- •Find Russian equivalents to the following English word combinations
- •III. Find the English equivalents to the following word expressions
- •IV. Listen, read and translate the text what is macroeconomics?
- •Grammar practice
- •Language practice
- •Speaking
- •Section 3.2. What is microeconomics? key vocabulary
- •II. Find the equivalents to the following word combinations
- •III. Give the English for the following
- •IV. Listen, read and translate the text microeconomics
- •Grammar practice
- •Language practice
- •XII. Match the terms and their definitions
- •XIII. Answer the following questions for general understanding
- •XIV. Translate into Russian
- •XV. Translate from Russian into English
- •XVI. Writing a summary is a useful activity to prepare for any oral task such as retelling or discussion.
- •XVII. Imagine, you are a participant at a scientific conference on economics. You have to make a 3 minutes report on the topic «Macro – and Microeconomics»
- •I. Read and remember the following words
- •II. Find equivalents in Russian
- •III. Give English for the following
- •IV. Listen, read and translate the text the market
- •Grammar practice
- •Language practice
- •XI. Translate into Russian
- •XII. Translate from Russian into English
- •XIII. Write a summary to the text «Market»
- •Speaking
- •XIV. Work in small groups. Think of the model of any market, say fast food, fashion goods or pharmaceutical goods, study the features of that market and see how it works in practice
- •Section 4.2. Demand, supply, and equilibrium key vocabulary
- •I. Read and remember the following words
- •Demand, supply, and equilibrium
- •The demand for and the supply of chocolate
- •Grammar practice
- •Language practice
- •XI. Make up questions to the following sentences
- •XII. Answer the following questions for general understanding
- •XIII. Read each statement given and decide which of the following is not true
- •XIV. Translate from Russian into English
- •XV. Look through the text once again and write a summary of this text
- •Speaking
- •X VI. Work in small groups. Think about examples of storable commodities, decide whether it is necessary in some economies to stock them and present your ideas to the class
- •XVII. Work in pairs. Read the information given below and think of and discuss the examples of the Giffen and the Veblen effects
- •X VIII. Make a brief report on the subject: «Demand and supply, and the Market»
- •Chapter 5. Competition section 5.1. The limiting cases of market structure key vocabulary
- •I. Read and remember the following words
- •II. Match each expression with its meaning
- •III. Read and translate the groups of words
- •IV. Translate the word combinations from Russian into English
- •V. Listen, read and translate the text the limiting cases of market structure
- •Grammar practice
- •Language practice
- •X. Read each statement below and decide which of the following is not true
- •XI. Make up questions to the following sentences
- •XII. Answer the following questions
- •XIII. Translate from Russian into English
- •Speaking
- •Section 5.2. Perfect competition key vocabulary
- •Perfect competition
- •Grammar practice
- •Language practice
- •XII. Join the halves of the sentences below
- •XIII. Make up questions to the following sentences
- •XIV. Answer the following questions
- •XV. Translate from Russian into English
- •Speaking
- •XVI. Talk to your partner and give one or two examples of a perfectly competitive market where neither buyers nor sellers believe that their own actions affect the market price.
- •XVII. Firstly work as a class and read the information below. Then think of examples of some firms and prove they are really perfectly competitive ones
- •Section 5.3. Competition in world markets key vocabulary
- •Read and remember the following words
- •II. Translate the following word combinations from Russian into English
- •III. Translate the word combinations from English into Russian
- •IV. Listen, read and translate the text competition in the world market
- •Grammar practice
- •Language practice
- •X. Fill in the gaps with the verbs given in brackets
- •XI. Answer the following questions
- •XII. Translate from Russian into English
- •Speaking
- •X IV. Prepare a 2 minutes report on the topic «Competition on the World Market»
- •Section 5.4. Oligopoly key vocabulary
- •I. Read and remember the following words
- •II Guess the meaning of the following word combinations from the text
- •III. Give English for the following
- •IV. Listen, read and translate the text oligopoly
- •Grammar practice
- •Language practice
- •Exercises
- •I. Open the brackets using the verbs in one of the following tenses: the Present Continuous, Present Simple, Past Simple or Future Simple
- •II. Open the brackets using the verbs in one of the following tenses: the Present Continuous, Present Simple, Past Indefinite or Future Simple
- •III. Open the brackets using the verbs in one of the following tenses: the Present Continuous or Past Continuous
- •IV. Open the brackets using the verbs in one of the following tenses: the Past Simple or Past Continuous
- •V. Open the brackets using the verbs in one of the following tenses: the Present, Past, Future Simple, Present, Past Continuous
- •VI. Open the brackets using the verbs in the following tenses: the Past Simple or Present Perfect
- •VII. Open the brackets using the verbs in the following tenses: the Past Simple or Present Perfect
- •VIII. Open the brackets using the verbs in the following tenses: the Past Simple or Past Perfect
- •IX. Open the brackets using the verbs in one of the following tenses: the Past Simple, Past Continuous or Past Perfect
- •X. Open the brackets using the verbs in one of the following tenses: the Present Perfect, Past Simple, Past Continuous or Past Perfect
- •XI. Put the verbs in brackets into the Present, Past or Future Perfect Continuous Tense
- •XII. Form the questions with the question word given
- •XIII. Translate into English
- •Section 1.2. The passive voice
- •Exercises
- •I. Answer the following questions
- •II. Transform the sentences from Active into Passive
- •III. Fill in each blank with the necessary form of the verb in the Passive Voice
- •IV. Put questions to the words given in bold type
- •V. Translate the following sentences into Russian
- •VI. Translate into English
- •VII. Put the verbs in brackets into the correct tense-form
- •VIII. Transfer the verbs in brackets into the correct tense form
- •IX. Translate from Russian into English
- •X. Translate into Russian
- •XI. Change these Active constructions into the Passive ones
- •Chapter 2. Non-finite forms of the verb section 2.1. The infinitive forms of the infinitive
- •Functions of the infinitive
- •Infinitive constructions Complex Object
- •Complex Subject
- •Exercises
- •I. Translate from English into Russian
- •II. Translate from Russian into English using Complex Object where necessary
- •III. Translate from Russian into English using Complex Object
- •IV. Translate from English into Russian and underline Complex Object
- •V. Transfer complex sentences into simple ones using Complex Subject and translate them
- •VI. Translate into Russian
- •VII. Translate sentences using Complex Subject
- •VIII. Translate from Russian into English using the «for» construction
- •Section 2.2. The participle forms of the participle
- •Functions of the participle
- •Participle constructions
- •Exercises
- •I. Translate into Russian, define the form and the function of the Participle
- •II. Translate into Russian, change Participle Construction into subordinate clauses
- •III. Change subordinate clauses into Participle Constructions and translate them into Russian
- •IV. Translate into English
- •V. Translate into English using the Objective Participial Construction
- •VI. Translate into Russian paying attention to the Absolute Participle Construction
- •VII. Translate into Russian, define the form and the function of the Participle
- •VIII. Translate into English
- •IX. Translate into Russian keeping the rule of translation of the Absolute Participle Construction
- •Complex gerund construction
- •I. Transfer the verb in brackets into the form of Gerund using the corresponding preposition
- •II. Change the subordinate clauses with the Gerund using the corresponding preposition where necessary
- •III. Translate into English using the Gerund
- •IV. Transfer subordinate clauses into the complex Gerund Constructions using the corresponding preposition
- •V. Translate into English with the help of the corresponding preposition
- •Tests tests to part I test I (chapters 1 – 3)
- •1. Упорядочение
- •2. Соответствие
- •3. Поле ввода
- •4. Заполнить пропуски. Завершите следующие фразы подходящим высказыванием:
- •5. Несколько полей ввода (вопрос – ответ)
- •Test II (chapters 4 – 8)
- •1. Упорядочение (распределение синонимов по группам)
- •2. Соответствие
- •3. Поле ввода
- •4. Заполнить пропуски. Завершите следующие фразы подходящим высказыванием:
- •5. Несколько полей ввода (вопрос – ответ)
- •Tests to part II test I (chapters 1 – 3)
- •1. Упорядочение по группам (объедините в группы слова близкие по значению по разделам a, b, c, d, e)
- •2. Соответствие в парах: соотнести английский вариант с русским
- •3. Поле ввода
- •4. Дайте развернутый ответ по ситуации
- •Test II (chapters 4 – 5)
- •1. Упорядочение: расположить по группам (объедините в группы слова близкие по значению: a, b, c, d, e)
- •2. Соответствие в парах: соотнести английский вариант с русским
- •3. Поле ввода
- •4. Найдите область на рисунке
- •5. Дайте развернутый ответ по ситуации
- •Answer keys to tests
- •Библиографический список
XVIII. Translate from Russian into English
1. Термин «рынок» означает встречу покупателей и продавцов с целью покупки или продажи товаров и услуг.
2. В некоторых случаях покупатели и продавцы встречаются лично.
3. Покупка или продажа может также быть осуществлена дистанционно.
4. Практически вся экономика посвящена изучению того, как рынки и цены позволяют обществу решать проблему «что, как и для кого» производить.
5. Исходя из нашего желания и наших ограниченных ресурсов, низкая цена показывает, что это хороший способ удовлетворить нашу потребность.
6. Если посмотреть на ситуацию с точки зрения продавца, то он будет продолжать заниматься тем или иным бизнесом только до тех пор, пока это приносит прибыль.
7. В случае отсутствия прибыли, продавец будет вынужден повысить цену, что, конечно же, приведет к снижению объемов продаж.
8. Если владелец не сможет продавать по цене, которая покрывает затраты, то, возможно, следует переключиться на другую сферу деятельности.
Speaking
XIX. Work in pairs or small groups. Think of the example of any seller and prove that it is profitable for him to be in the business.
XX. Making a report. Make a report on the role of the market. Use simple language
Tip:
Section 2.2. The command economy, the free market economy and the mixed economy key vocabulaty
I. Read and remember the following words
highlight ['haІlaІt] – выдвигать на первый план
exist [І'gzІst] – существовать
government ['gƆvenmənt] – руководство
complicated [̗kƆmplІ:'keІted] – сложный
immensity [І'mensІtІ] – необъятность, огромный масштаб
coherent [kəu'hІərənt] – согласованный
consume [kəu'sju:m] – потреблять
housing ['hauzІŋ] – жилье
pursue [pə'sju:] – гнаться, преследовать
insight ['ІnsaІt] – проникновение в суть, понимание, проницательность interference [Іntə'fІərəns] – вмешательство, помеха, препятствие
at length [lenθ] – детально, обстоятельно, подробно
output [`autput] – объем производства
espouse [Іs'pauz] – поддерживать
II. Translate and remember the following word combinations
play around with new ideas, invent a new good, make society better off, to move society's production possibility frontier outwards, a coherent society.
III. Find the English equivalents to the following word expressions
удивительная сущность, подробно, ограничения, выпуск продукции, преследовать, масштаб, напротив, существенный уровень, принадлежащий государству, трудящиеся, механизм распределения, подчеркнуть роль, трансфертный платеж, регулировать размер чего-либо, поддерживать подход, сосуществовать с чем-либо.
IV. Listen, read and translate the text the command economy, the free market economy, the mixed economy
The Command Economy
To highlight the role of markets and prices, we now ask how resources might be allocated if markets did not exist. One example is a command economy.
A command economy is a society where the government makes all decisions about production and consumption. A government planning office decides what will be produced, how it will be produced, and for whom it will be produced. Detailed instructions are then issued to households, firms, and workers.
Such planning is a very complicated task, and there is no complete command economy where all allocation decisions are undertaken in this way. However, in many countries, for example in the Soviet bloc, there was a large measure of central direction and planning. The state owned factories and land, and made most important decisions about what people should consume, how goods should be produced, and how much people should work.
To appreciate the immensity of this task, imagine that you had to run by command the city in which you live. Think of the food, clothing, and housing allocation decisions you would have to make. How would you decide who should get what and the process by which these goods and services would be produced? Of course these decisions are being made every day in your own city, but chiefly through the allocative mechanism of markets and prices.
The Invisible Hand or Free Market Economy
Markets in which governments do not intervene are called free markets.
Individuals in free markets pursue their own interests, trying to do as well for themselves as they can without any government assistance or interference. The idea that such a system could solve the what, how, and for whom problems is one of the oldest themes in economics, dating back to Adam Smith, the famous Scottish philosopher-economist whose book The Wealth of Nations (1776) remains a classic. Smith argued that individuals pursuing their self-interest would be led «as by an invisible hand» to do things that are in the interests of society as a whole.
Suppose you wish to become a millionaire. You play around with new ideas and invent a new good, perhaps the television, the motor car or the hand calculator. Although motivated by our own self-interest, you make society better off by creating new jobs and opportunities. You have moved society's production possibility frontier outwards – the same resources now make more or better goods – and become a millionaire in the process. Smith argued that the pursuit of self-interest, without any central direction, could produce a coherent society making sensible allocative decisions.
This remarkable insight has been studied at length by modern economists.
The Mixed Economy
The free market allows individuals to pursue their self-interest without any government restrictions. The command economy allows little scope for individual economic freedom since most decisions are taken centrally by the government. Between these two extremes lies the mixed economy.
In a mixed economy the government and private sector interact in solving economic problems. The government controls a significant share of output through taxation, transfer payments, and the provision of goods and services such as defence and the police force. It also regulates the extent to which individuals may pursue their own self-interest.
In a mixed economy the government may also be a producer of private goods such as steel or motor cars. Examples of this in the UK include the nationalized industries such as railways and coal.
Most countries are mixed economies, though some are close to command economies and others are much nearer the free market economy. Even the Soviet Union allowed consumers some choice over the goods they bought. Private agricultural markets co-existed with centrally organized «collectives». Conversely, even countries such as the United States which espouse more enthusiastically the free market approach, still have substantial levels of government activity in the provision of public goods and services, the redistribution of income through taxes and transfer payments, and the regulation of markets.