Invest accept market manage employ

perish avail pay improve value

Now use suitable words to complete the following sentences.

1. Originally, a _______ metal (such as gold, silver or copper) served as a constant store of value.

2. The new government scheme will encourage the flow of _______ into small and growing businesses and revive the local economy.

3. Profit is usually _______ for employers and their families and to those who provided the initial capital.

4. Market price is a price _______ both for sellers and buyers of a specific product.

5. The _______ of the firm decided to pay higher wages to the employees not to lose valuable workers.

Exercise 7. Fill in the blanks with appropriate prepositions.

1. Every society is faced ___ the problem ___ scarcity.

2. Each factor ___ production has a place ___ our economic system.

3. Economic incentives influence our decisions ___ what and where to buy.

4. People ordinarily buy more ___ а product ___ а low price than they do ___ а high price.

5. Resources ___ a market economy are allocated ___ accordance ___ the laws ___ supply and demand.

6. I went ___ business last year.

7. In a free market economy prices are determined ___ the interaction ___ the forces ___ supply and demand.

8. He told me that there would be change ___ price.

9. Economists are interested ___ measuring the GNP.

10. The supply of oil is adjusted ___ market conditions.

Exercise 8. The Crossword Puzzle.

Read the given definitions and fill in the crossword puzzle.

Across

2. the amount of money that you must pay in order to buy something

3. completely necessary; that you must have or do

5. settled; lasting, permanent; not varying or subject to alteration

6. a person who buys goods or services

8. things that are for sale

9. a business whose work involves doing something for customers but not producing goods

Down

1. the desire or need of customers for goods or services which they want to buy or use

2. priorities; what you like more than another

4. overproductivity, superabundance, redundancy

7. the money that you make when you sell something for more than it cost you

Exercise 9. Punctuate the following passage. Provide capital letters, commas, full stops, brackets, colons etc., where applicable.

historically the most recent function of government is that of stabilizing the economy assisting the private economy to achieve the full employment of resources and а stable price level hеrе we will only outline how government tries to do this the level of output depends directly on total or aggregate expenditures a high level of total spending means it will be profitable for industries to produce large outputs this means that both property and human resources will be employed at high levels but aggregate spending may either fall short of or exceed that particular level which will provide for full employment and price stability two possibilities unemployment or inflation may then occur

Exercise 10. Read the text below. Choose the best word to fill each gap from A, B, C or D below. There is an example at the beginning. 0).

Supply

Supply is one of the two words economists use most, along with 0)__B___. These are the twin 1)_____ forces of the market economy. Supply is the amount of a good or service 2)_____ at any particular price. The law of supply is that, other things remaining the 3)_____, the quantity supplied will increase as the price increases. The actual amount supplied will be determined, ultimately, by what the 4)____ price is, which depends on the amount demanded as well as what suppliers are willing to 5)____ . What suppliers are willing to supply depends on several things:

• the cost of the 6)____ of production;

• technology;

• the price of other goods and services (which, if high enough, might tempt the supplier to 7)____ production to those products); and

• the ability of the supplier accurately to 8)____ demand and plan production to make the most of the opportunity.

0 A employment B demand C economy D economics

1. A effective B driving C useful D economic

2. A available B sold C present D used

3. A stable B changing C same D similar

4. A fixed B market C selected D ultimate

5. A work out B buy C consume D produce

6. A things B factors C tools D wares

7. A switch B change C exchange D shift

8. A provide B advance C forecast D find

Exercise 11. Read the text about price. In most of the lines 1 – 12 there is one extra word. It is either grammatically incorrect or does not fit in with the sense of the text. Some lines, however, are correct. Determine the correct and incorrect lines as given in two examples (0) and (00).

0 between 00 correct

Price

0 00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Price is in equilibrium, what balances between supply and demand. The price charged for something depends on the tastes, income and elasticity of demand of customers. It is depends on the amount of competition in the market. Under perfect competition, all firms are of price takers. Where there is a monopoly, or firms have some of market power, the seller has some control over the price, which will probably be the higher than in a perfectly competitive market. By how much more will depend on to how much market power there is, and on whether the firm(s) with the market power are committed to do profit maximisation. In some of cases, firms may charge less than the profit-maximising price for strategic or in other reasons. Price elasticity is a measure of the responsiveness of demand to a change in price. If demand changes by more than the price has been changed, the good is the price-elastic. If demand changes by less than the price, it is price-inelastic. Economists are also measure the elasticity of demand to changes in the income of consumers.

Exercise 10. Reading.