Task 1. Complete the text with the words in the box

1. direct trade	5. Money	9. transacting	13. property rights	17. consume
2.specialization	6. expectations	10. households	14.arrangements	18. uncertainty
3. consumption	7. Transaction costs	11. economy	15. minimal restrictions	19. producing goods
4. scarce resources	8. to transfer	12. the medium of exchange	16. commodities	20. An intermediary

Transacting

Transacting often takes more time; ( 4 ) that might have been used to produce goods services are frequently used in ( 9 ).

For instance, resources used to transport commodities from one location to another cannot be used to produce ( 16 ) that individuals might ( 17 ). In this case, exchange will have an opportunity cost in terms of the other uses to which these resources could have been put.

( 7 ) are the opportunity costs of using productive resources (including time and effort) in making trades rather than in ( 19 ) and services for ( 3 ) or other purposes. Transaction costs are so pervasive and the gains from exchange and specialization so great, however, that social arrangements have evolved in order to lower transaction costs for everyone. In general, when transactions are costly, indirect trade rather than

( 1 ) will lower transaction costs.

The two important social ( 14 ) that set up indirect trade are the use of money and the use of intermediaries. ( 5 ) is the thing that is commonly used in virtually all transactions consequently, it is frequently referred to as ( 12 ).

( 20 ) is a person or organization that specializes in trading rather than producing goods, thereby lowering the costs of transactions for any non-specialists who use the services of the intermediary. Frequently intermediaries are called middlemen. Firms and ( 10 ) also lower certain kinds of transaction costs by organizing economic activity in particular ways.

Finally, when uncertainty about what can and cannot be done undermines the gains from exchange or specialization a society may evolve rules in an effort to lower the costs associated with ( 18 ). The gains from exchange and ( 2 ) can only be fully realized if self-interested individuals have future interests or expectations. These expectations are of three sorts:

• expectations about the right to exclude;

• expectations about the right to consume with ( 15 );

• expectations about the right ( 8 ).

These kinds of expectations are referred to as ( 13 ).

Every economy, whether capitalist, socialist, communist, or traditional, has to decide how it will create the appropriate sort of ( 6 ) about future use.

In this sense every ( 11 ) has to develop something like property rights.

Task 2. Match each of the words or phrases on the left to an appropriate definition.

1 arrangement e	a) the fact of doing sth or working together with sb else to achieve sth
2 export f	b) a small card printed with sb's name and details of his/her job and company
3 loss i	c) things that are for sale
4 objective h	d) 1) a move up to a higher position or more important job 2) activities done in order to increase the sales of a product or service; a set of advertisements for a particular product or service
5 profit share g	e) plans or preparations for sth that will happen in the future
6 invest j	f) something that is sent to another country for sale
7 co-operation a	g) a system in some companies in which the profit the company has made, for example in one year, is shared out between its directors, shareholders, etc.
8 promotion d	h) something that you are trying to achieve
9 goods c	i) money that has been lost by a business or an organization
10 business card b	j) to put money into a bank, business, property, etc. in the hope that you will make a profit

Task 3. Fill in the blanks using the word combinations given below, translate the letter.

Letter 1.

( e ) from your letter of 10 October of the difficulty in which the bankruptcy of an important customer has placed you.

I should like to say at once that we ( c ) for an extension of time and ( a ) to help you.

( f ) because of commitments which we must meet by the end of this month.

Your request is not at all unreasonable and if it had been possible ( d ) to grant it. ( b), however, we must ask you to settle with us on the terms of payment originally agreed.

a) would like to be able

b) in the circumstances

c) fully understand your wish

d) we would have been pleased

e) I am sorry to learn

f) unfortunately this is impossible

Letter 2.

( f ) an order with Electrical Supplies Ltd, Birmingham, ( e ). As this will be a first order they have asked me ( d ).

I have been ( c ) for the past 4 years and ( b ) if you would allow me to submit your company’s name as one of my references.

( a ) your consent to stand as referee and hope to hear from you soon.

a) I shall very much appreciate

b) should be grateful