Unit I. Economics and Economists

GRAMMAR REVIEW: Personal and Possessive Pronouns. Tenses Active and Passive. Conditional Clauses.

Person	Singular	Plural
	Subject pronoun	Object pronoun	Possessive 1 adjective	Possessive 2 pronoun	Subject pronoun	Object pronoun	Possessive 1 adjective	Possessive 2 pronoun
	I	me	my	mine	we	us	our	ours
	you	you	your	yours	you	you	your	yours
	he she it	him her it	his her its	his hers its	they	them	their	theirs

Choose proper pronouns for the nouns.

1. My friend defended his diploma project.	1) they
2. Students study mathematics.	2) them
3. I attend lectures.	3) he
4. Our University trains specialists for shipbuilding industry.	4) it
5. The hostel is not far from the University	5) their
6. Students’ life is interesting.	6) them

Use the right pronoun.

1. Kate and (I, me) work together. 2. We spent our holiday together with (them, they).3. My sister and (I, me) are good friends. 4. It's (he, him). 5. (She, her) writes to (he, him) every day. 6. (We, us) enjoy playing tennis. 7. Will you give (her, she) and (I, me) some help? 8. Helen and (they, them) are next-door neighbours.

1. (My, me) aunt Susan is (my, me) mother's sister. 2. (Our, us) relatives are coming to see (our, us) today. 3. Tell (them, their) about it. 4. Is this (you, your) dog? There is something wrong with (it, its) ear. 5. Ask (him, his) if it's (him, his) car. 6. George and Carol are having (them, their) lunch. 7. He gave (me, my) (him, his) photograph in which I couldn't recognize (him, his). 8. We were surprised to see (them, their) on the platform, they also came to meet (our, us).

Use the pronouns: me, you, him, her, it, us, them.

1. She gave ... the book and asked to return ... to ... next week. 2. Are you going to invite ... to your party? She is such a bore! 3. My parents are coming to see ... on Saturday. I like to spend my weekend with.... 4. I didn't like the film. I don't want to speak about.... 5. We'll be very happy if you go on a trip with.... 6. Don't ask... this question. I don't know how to answer.... 7. If she doesn't arrive tomorrow send... a telegram. 8. I'm sorry to trouble..., but I want... to do ... a favour. 9. Let's not wait for..., they are always late. 10. Do you want... to do it for...? I don't mind....

Text 1. What is Economics?

Words and word combinations on the text. Learn them.

accurate definition	—	точное определение
areas n	—	области, сферы
affect prices	—	влиять на цены
behaviour n	—	поведение
data n	—	данные, сведения
decision n	—	решение
make a decision	—	принимать решение
develop v	—	развивать, развиваться
development n	—	развитие
development economics	—	экономика развивающихся стран
essential a	—	существенный, ощутимый
growth n	—	рост, подъем
grow, grew, grown v	—	расти
labour n	—	труд
in order to	—	чтобы
particular a	—	отдельный, особый, специфический
predict v	—	предсказывать
prediction n	—	предсказание

1.5. Translate the word combinations:

market analysis, labour economics, labour market study, goods and services prices, growth economics problems, actual economic situation details, consumer behaviour, future prediction, growth mechanism, agriculture and manufacturing relationship, mineral resources prices, agricultural product price growth, area development, trade growth prediction

1.6. Read the words paying attention to the stressed syllables:

increase v, increase n, effort, develop, supply, supplier, compete, competition, convenience, distribute, distribution, income, economist, economics, microeconomics, economic, economize, invest, investor, investment, act, active, actively, activity, formal, formality, limit, limitation, limited, unlimited, require, measure, excess, advanced, average, independence, per capita

Read the text and answer the questions.

1. What problems are economists interested in? 2. What are three main approaches to economics? 3. What specialized areas of economics do you know? 4. Why do economists use economic models? 5. Why is it not possible to include all the details in a model? 6. What does a model usually include? 7. Which of the models does an economist always choose? 8. Why is it necessary for an economist to collect and study actual data?

What is Economics?

It is difficult to give a full and accurate definition of economics, but it is possible to indicate what problems economists are interested in. They are factors that affect prices of goods and services and also resources necessary to produce them. Economists are also interested in sellers’ and buyers’ behaviour in the market, in the relationship between “price system” and “market mechanism”.

Now economics is more complex. There are three main approaches to economics: microeconomics, macroeconomics, and development economics. There are also several specialized areas of study. Among them are money economics, international economics, labour economics, industrial economics, agricultural economics, growth economics, mathematical economics, etc.

Like many other sciences, economics uses models to understand economic problems. A model often helps an economist to make correct predictions. The economist usually follows several rules when he makes a model of economic behaviour.

First, real life is complex and it is not possible for an economist to include all the details in a model. So, a model is an abstraction from real life. A model usually includes only essential elements and relationships of a particular economic situation.

Second, if an economist has two different models of one phenomenon, he always chooses the model that predicts the results of a particular phenomenon more accurately.

Third, although models are helpful in economic analysis, an economist always studies the actual economic situation before he makes decisions.

It is not enough to make models, it is also necessary to collect and study actual data in order to know how accurate a model is.

1.8. Match part A with part B.

1. Resources and labour are necessary

2. It is necessary to know marketing

3. It is not enough to study economic theory

4. Like other sciences, economic theory

5. To buy goods and services it is necessary for a consumer

6. It is not always possible to predict

7. To have enough money for his

8. Development of trade

a) is essential for economic growth of a country.

b) the results of every phenomenon.

c) to produce goods.

d) to sell goods and services well.

e) to have enough money.

f) to be a good economist.

g) family he works a lot.

h) to analyse a real life situation.

Text 2. Areas of Economics

Areas of Economics

There are three main approaches to economics: microeconomics, macroeconomics, and development economics.

Microeconomics focuses on individual economic units. The economic behaviour of either individual consumers or firms or industries is studied by microeconomics. The distribution of products and income among all these units is also analyzed by microeconomics. In this field of economics individuals are considered both as suppliers of labour and as consumers of labour and capital.

There was a long period in the 19th and early in the 20th centuries when microeconomic questions dominated in economics. In the 20th century economists’ interest in forces that affect income, employment and prices grew. They considered economy in all its relationships.

The term “macroeconomics” was first used in the 1930s. The world depression that began in 1929 required the study of such macroeconomic questions as achievement of full employment and economic growth by means of proper government policies. This area of economics was developed by the British economist John Maynard Keynes.

The third main field of economics, that is, development economics, studies the factors of economic growth and how these factors are used by governments in order to achieve high living standards.

1.14. Complete the sentences by putting the verbs in brackets into the Present Simple or Present Continuous.

1. I (look at) the details on the screen right now. 2. I (look at) the sales results in detail every month. 3. The production line (not work) at weekends. 4. The production line (not work) at the moment. 5. Yes, I agree. I (think) it’s a good idea. 6. I (think) about it. I’ll let you know tomorrow. 7. Ann (stay) at the Astoria while she’s in Madrid this month. 8. Ann (stay) at the Astoria when she’s in Madrid. 9. We (take) a sample for testing once a day. 10. We (take) a big risk if we go ahead with the project. 11. They (be) usually very flexible if we need to change the order.

1.15. Choose the correct form of the verb.

1. A: Did you get / got the email I sent you yesterday?

B: Yes, thanks, I did / got.

2. How you felt / did you feel when they told / did tell you about moving offices?

3. A: Did you tell / told him about the change of plans?

B: Yes, I told / I did.

4. I didn’t see / didn't saw the reason for the delay, so I got / did get angry.

5. A: What was she doing this morning?

B: She interviewed / was interviewing candidates for sales job.

6. A: How did Brenda spend her holiday?

B: Most days she went / was going to the beach.

7. A: What happened after you launched the product?

B: While we promoted / were promoting it, our main competitor dropped / was dropping their prices.

1.16. Rewrite these sentences, putting the verbs into the Passive. Keep them in the same tense, and removethey, we, he, etc.

Example: Many companies produce furniture → Furniture is produced by many companies.

1. Banks provide new services for consumers. 2. They use models in order to study actual relations in an economy. 3. The economists predicted the growth of unemployment. 4. We consider individuals as suppliers of labour and capital. 5. The government achieved high employment. 6. The economist chose correct methods and models for his analysis. 7. They employ many workers in the service sector. 8. They developed mining industry in the 19th century in Great Britain, but in the 20th century they closed down many mines. 9. He wrote the book in 1968. 10. They followed these principles in the analysis of the economic situation.

1.17. Match the headlines (1–4) to the stories (a–b).

1.Factory to close 2.Sale to stop 3.Brin Bros to close for one month 4.Zephyr in the Orient	a.Zephyr Cycles are going to be available in China after the company launches its products there next year.	c.The Bestco chain of supermarkets is going to stop selling all processed fish products from Italy, Spain and Greece as a result of recent pollution in the Mediterranean.
b.The Pro-tech company announced yesterday that it is going to close its factory in Prague and concentrate production in its Oslo plant.	d.Brin Bros' main London department store is going to close for all of September this year to allow extensive modernization of the store.

Supermarket Economics

Supermarkets offer valuable economic lessons. The modern supermarket illustrates in a small way how the market system operates in the economy as a whole. Each supermarket has tens of thousands of items of various sizes and brands. Store owners and managers compete for the customers’ dollars by trying to offer the best service and the greatest variety of goods possible at prices their customers are willing to pay. The modern supermarket provides everything from basic foods to gourmet items from any place in the world. Supermarkets also sell cosmetics, toys, small appliances and even videos of recent movies. They attempt to maintain a bright and cheerful atmosphere that will make shopping pleasant for large numbers of customers.

Information about consumer preferences in this huge mix of products is generated by a simple procedure. Consumers take their selection to the checkout line. Checkout clerks enter information about the sale on the store’s computer by passing the product’s bar code across a scanner.

The store responds to differing consumer preferences for health, economy and convenience by stocking the goods consumers prefer. Products that fail to satisfy are replaced by more attractive products. “Winners” are selected and the “losers” gradually lose shelf space. Ultimately producers either improve their products or pass from the scene. The consumer is really king. The market registers their preferences and reconciles supply with demand.

Text 4. British Economy

Words on the text.

account for v	—	зд. обеспечивать
contribute v	—	делать вклад, зд. составить
impact n	—	влияние
improve v	—	улучшать
insurance n	—	страхование
pattern n	—	модель
wealth n	—	благосостояние, богатство

British Economy

Britain became the world’s first industrialized country in the late 18th and early 19th centuries. Wealth was based on the manufacture of iron and steel, heavy machinery and cotton textiles, and coal mining, shipbuilding and trade. However, the economic and industrial pattern has changed considerably in the past few years. Service industries now contribute about 66 per cent of gross domestic product, and account for 75 per cent of employment. Britain is a world leader in the provision of financial and business services, and tourism is another major growth area. The City of London has more overseas banks than any other financial centre, and has one of the world’s largest international insurance markets.

Manufacturing still plays a significant role, and high-technology industries – such as pharmaceuticals, biotechnology, chemicals, plastics and electronics – have been particularly successful. Offshore oil and gas have had a major impact on the economy.

Britain is the fourth largest trading nation, accounting for around 5.7 per cent of world trade in goods and services. As a member of EU, it is part of the world’s largest established trading group, responsible for 40 per cent of world exports.

The country has a well-established network of motorways and inter-city rail services. The Channel Tunnel, which opened in 1994, has further improved links with continental Europe. London’s Heathrow Airport is the world’s busiest airport for international passengers.

1.43. Conditional clauses (If-clauses).

IIf I have enough time, I’ll finishthe report tonight.

Если у меня будет достаточно времени, я закончу доклад сегодня вечером.

IIIf I had enough time, I would finish the report tonight. (I don’t have enough time)

Если бы у меня было достаточно времени, я бы закончил доклад вечером.

IIIIf I had hadenough time, I would have finishedthe report yesterday. (but I didn’t have enough time, so I didn’t finish the report yesterday)

Если бы у меня было достаточно времени, то я бы закончилдоклад вчера.

Words other than if

Other words can be used instead of if in conditional clauses:

a) unless = “if not” – если не

I’ll go home if the film doesn’t start.

I’ll go home unless the film starts.

b) provided (that) – при условии, что

Provided that everybody agrees, we’ll have the meeting on Tuesday.

Words on the text.

accordingly adv	—	соответственно
acquire v	—	приобретать, получать
agree v	—	быть согласным, соглашаться
argue v	—	зд. утверждать
article n	—	предмет, товар
believe in v	—	верить во что-л.
effort n	—	усилие, попытка
enact v	—	издавать (законы), предписания
exceed v	—	превышать, превосходить
excess n	—	избыток, излишек
favourable balance of trade	—	активный (платежный) торговый баланс
goal n	—	цель
increase n	—	рост, увеличение
list v	—	перечислять, вносить в список
manufactured a	—	промышленный
mercantilism n	—	меркантилизм
profit n	—	прибыль, доход
prohibit v	—	запрещать
other than	—	кроме
regard v	—	считать, полагать, рассматривать
resentment n	—	негодование
restrict v	—	ограничивать
supply of gold	—	золотые запасы

1.46. Read the text and answer the questions below.

1. What is a “favourable balance of trade”? 2. In what way did the major European countries try to achieve a "Favourable balance of trade"

Now read the text again and translate it.

The First Modern Economists

The Mercantilists.Between the 16th and 18th centuries, the major countries of Europe believed in the economic theory of mercantilism. Mercantilists argued that nations should behave as if they were merchants competing with one another for profit. Accordingly, governments should support industry by enacting laws designed to keep labour and other production costs low, and exports high. In this way the nation could achieve what was called a “favourable balance of trade”.

“Favourable balance of trade” described a situation in which exports exceeded imports. The excess, which was like profits to a merchant, would result in an increase in the nation’s supply of gold or silver. And, as most people agreed in those days, the true measure of a nation’s wealth was its supply of gold or silver.

To achieve favourable trade balances, the major European powers tried to acquire colonies. Colonies, it was thought, could provide the “mother country” with cheap labour, raw materials and a market for its manufactured goods.

In an effort to achieve these goals in their American colonies, the British, for example, enacted the Navigation Acts. The Navigation Acts protected British industry by prohibiting the colonies from producing certain goods like hats, woolen products etc. The laws also listed certain “enumerated articles” (mostly raw materials) which could not be sold to buyers in countries other than England.

Resentment towards the Navigation Acts was so great that they are regarded as one of the principal causes of the Revolutionary War.

Today there are people who still argue that their country should promote a “favourable balance of trade”, that their national government should do what it can to restrict imports and promote exports. For that reason, they are often described as neo-mercantilists or “new” mercantilists.

B. Choose the best heading.

1. The greatest classical economist.

2. Classical champion of free trade.

3. Free trade removes all the tariffs.

4. English economics is the most efficient in the world.

Grammar and Lexical Test

1. The prices for fuel ____ very high.

a be b is c are d was

2. Many workers ____ in the service sector.

a employ b be employed c is employd d are employed

3. High employment ____ by the government.

a was achieved b be achieved c achieves d were achieved