Ex 4. Speak about yourself and answer the questions you have put before each paragraph

Ex 5. Role-play: hold a TV Talk Show on the problem of choosing a university course.

Unit IV

Part 1

Competition

competition, monopoly, oligopoly, perfect competition, product differentiation, incentive

Text A

Competition is the rivalry of two or more parties over something. Competition occurs naturally between living organisms which coexist in an environment with limited resources. For example, animals compete over water supplies, food, and mates. In addition, humans compete for recognition, wealth and entertainment.

Competition can be remote, as in a free throw contest, or antagonistic, as in a standard basketball game. These contests are similar, but in the first one players are isolated from each other, while in the second one they are able to interfere with the performance of their competitors.

Competition gives incentives for self-improvement. If two watchmakers are competing for business, they will lower their prices and improve their products to increase their sales. If birds compete for a limited water supply during a drought, the more suited birds will survive to reproduce and improve the population.

Competition is another important force of the market. On the one hand, it protects the customers — they have the right of choice and they benefit from the fact that competition keeps prices close to costs; on the other hand, it makes producers and suppliers of scarce resources utilize them economically, using most sophisticated technologies.

All businesses produce goods and services and seek profits. They all compete with each other for inputs of labour, capital and natural resources, including foreign partners.

Seen as the pillar of capitalism in that it may stimulate innovation, encourage efficiency, or drive down prices, competition is touted as the foundation upon which capitalism is justified. According to microeconomic theory, no system of resource allocation is more efficient than pure competition. Competition, according to the theory, causes commercial firms to develop new products, services, and technologies. This gives consumers greater selection and better products. The greater selection typically causes lower prices for the products compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).

However, competition may also lead to wasted (duplicated) effort and to increased costs (and prices) in some circumstances. For example, the intense competition for the small number of top jobs in music and movie acting leads many aspiring musicians and actors to make substantial investments in training that are not recouped, because only a fraction become successful. Similarly, the psychological effects of competition may result in harm to those involved.

Three levels of economic competition have been classified:

1. The most narrow form is direct competition (also called category competition or brand competition), where products that perform the same function compete against each other. For example, a brand of pick-up trucks competes with several different brands of pick-up trucks. Sometimes two companies are rivals and one adds new products to their line so that each company distributes the same thing and they compete.

2. The next form is substitute or indirect competition, where products that are close substitutes for one another compete. For example, butter competes with margarine, mayonnaise, and other various sauces and spreads.

3. The broadest form of competition is typically called budget competition. Included in this category is anything that the consumer might want to spend their available money on. For example, a family that has $20,000 available may choose to spend it on many different items, which can all be seen as competing with each other for the family's available money.

Competition does not necessarily have to be between companies. For example, business writers sometimes refer to "internal competition". This is competition within companies. The idea was first introduced by Alfred Sloan at General Motors in the 1920s. Sloan deliberately created areas of overlap between divisions of the company so that each division would be competing with the other divisions. For example, the Chevy division would compete with the Pontiac division for some market segments. Also, in 1931, Procter & Gamble initiated a deliberate system of internal brand versus brand rivalry. The company was organized around different brands, with each brand allocated resources, including a dedicated group of employees willing to champion the brand. Each brand manager was given responsibility for the success or failure of the brand and was compensated accordingly. This form of competition thus pitted a brand against another brand. Finally, most businesses also encourage competition between individual employees. An example of this is a contest between sales representatives. The sales representative with the highest sales (or the best improvement in sales) over a period of time would gain benefits from the employer.

It should also be noted that in most countries competition often is subject to legal restrictions. For instance, competition may be legally prohibited as in the case with a government monopoly or a government-granted monopoly. Tariffs, subsidies or other protectionist measures may also be instituted by government in order to prevent or reduce competition. Depending on the respective economic policy, the pure competition is to a greater or lesser extent regulated by competition policy and competition law.

Competition between countries is quite subtle to detect, but is quite evident in the world economy, where countries like the US, Japan, the European Union and the East Asian Tigers each try to outdo the other in the quest for economic supremacy in the global market.

A monopoly (from Greek mono, alone or single + polo, to sell) is a persistent situation where there is only one provider of a product or service in a particular market. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. A government-granted monopoly or legal monopoly is sanctioned by the state, often to provide an incentive to invest in a risky venture. The government may also reserve the venture for itself, thus forming a government monopoly.

Vocabulary List

1. competition — конкуренция

syn. rivalry, contest

2. pure competition – чистаяконкуренция

syn. perfect competition

3. direct competition – прямаяконкуренция

4. indirect competition – косвенная конкуренция

5. remote — отдаленный

6. to interfere with — вмешиваться

7. incentive — стимул

8. to lower — понижать

syn. to drive down

9. monopoly — монополия

10. oligopoly — олигополия

11. wastedeffort — напрасно потраченные усилия

12. to make investments (in) — вкладыватьсредства

13. toresultinsmth — иметь результатом что-либо

14. to substitute — заменять

15. available — имеющийся в наличии

16. to encourage — поощрять

17. to be subject to something – подлежатьчему-либо, подвергаться

18. to be restricted — бытьограниченным

syn. to be limited

19. to prevent — предотвратить

20. to outdo — перегнать

21. toreduce — сокращать

22. viable — жизнеспособный

23. to be sanctioned by the state — бытьразрешеннымгосударством

Notes

1. Competitionoccursnaturallybetweenlivingorganisms — конкуренция естественно существует между живыми организмами...

2. recognition — зд. признание

3. thepillarofcapitalism — зд. основы капиталистической системы

4. ...only a fraction become successful — зд. Лишьмалаячастьдостигаетуспеха

5. internal "brand versus brand" rivalry — внутренняяконкуренциямеждубрендами

6. to gain benefits — зд. получатьпремии

Ex 1. Suggest the Russian equivalents:

an environment with limited resources; to interfere with the performance of their competitors; to keep prices close to costs; sophisticated technologies; products that are close substitutes; to champion the brand; economical competition; to be legally prohibited; protectionist measures; to be regulated to a greater or lesser extent; a lack of viable substitute goods.