Lesson 8 HOW FIRMS COMPETE
I. Read and memorize the following words, word- combinations and word-groups:
to influence the market — мати вплив на рийок e,g. No individual or group can influence the behavior of
the market.
interchangeable — взаємозамінний
e.g. The individual securities of a particular firm are totally
interchangeable.
at will — за власним бажанням
e.g. Traders can buy or sell individual securities at will.
collusion — домовленість; зговір
e.g. Collusion is a secret arrangement between two or
more firms to fix prices or share the market.
utilities — підприємства громадського користування;
комунальні послуги
e.g. Public utilities are privately owned firms that provide
an essential public service, merger — об'єднання (підприємств) integration — інтеграція, об'єднання
e.g. The combination of two or more book publishing
firms would be an example of a horizontal merger or horizontal integration, trademark — торгова марка
e.g, Trademarks are special designs, names or symbols that
identify a product, service or company,
II. Give English equivalents to the following:
комунальні послуги ринок
торгова марка об'єднання (підприємств) надавати перевагу угода конкуренція за власним бажанням
взаємозамінний патент монополія мати вплив на ринок продавець покупець
III. Fill in the blanks with appropriate words:
1. Economists often speak of the «structure» I market priceof a ., . . [
і
2. ... are able to enter or to leave the buyers and sellers market at will. monopoly
3. A market in which there is only one trademark seller is a ... . patents
A, ... motivates producers to improve market the quality and increase the variety of competition
goods and services, firm
5. «Coke» is a ... of the Coca-co!a Company.
6. In a monopoly supply is determined by a single ... .
7. Under conditions of perfect competition ... could be found at the intersection of the supply and demand curves.
8. The products of certain industries such as aluminium, chemicals and electronics, are protected by ... >
IV. Read and translate the text:
Markets exist wherever people come together to buy and sell their goods and services. In economic systems during such hours, consumers and producers exchange their goods and services in many competitive markets.
A perfectly competitive market, according to economists, requires all of the following conditions:
.Many buyers and sellers; no individual or group can influence the behavior of the market.
'Identical goods or services offered for sale.
.No buyer or seller knows more than any other about the market.
Buyers and sellers are able to enter or leave the market at will. Few markets have all these characteristics. The New York Stock Exchange, the American Stock Exchange and other similar securities markets, however, are good examples of perfect competition. The individual securities of a particular firm are
totally interchangeable.
Collusion is a secret arrangement between two or more firms to fix prices or share the market. These agreements are usually illegal.
Public Utilities are privately owned firms that provide an essential public service. They are granted a monopoly because it is felt that competition would be harmful to the public interest.
Trademarks are special designs, names or symbols that identify a product, service or company. Many businesses are naturally interested in growing and controlling as much of a market — or several markets — as possible- One way to accomplish this goal is through a merger.
Mergers fall into three categories: horizontal, vertical, or conglomerate.
The combination (or «integrating») of two or more companies engaged in the same business is a horizontal merger, The combination of two or more book publishing firms would be an example of a horizontal merger or horizontal integration.
A conglomerate merger combines two or more unrelated businesses under a single management (pp. 87—94),
V. Answer the following questions:
1. When do markets exist?
2. What does a perfectly competitive market require?
3. What are Public Utilities?
4. Why are they granted a monopoly?
5. What is a trademark?
6. In what way does the competition among producers benefit us all?
7. How can many businesses grow and control as much of amarket as possible?
8. How many categories do mergers fall into? Name them.
VI. Define the terms:
| interchangeable | to fix prices |
| to influence the market | conglomerate merger |
| single management behavior of a market | competitive market |
VII. Translate into English:
1. Ринок існує скрізь, де люди збираються разом, щоб купити або продати свої товари та послуги, 2. Покупці та продавці можуть виходити на ринок або залишати його за власним бажанням. 3. Приватні цінні папери певної фірми цілком взаємозамінні, 4. Зговір — це секретна домовленість між двома або більше фірмами про встановлення цін і розподіл ринку, 5. Конкуренція в сфері підприємств громадського користування вважається шкідливою для громадського Інтересу, 6. Одна з умов найбільш конкуренток спроможного ринку це те, що жодна приватна особа або група не можуть мати вплив на ринок, 7. Конгломерат об'єднує дві або більше незалежних фірм під єдине керівництво»
VIII. Read and dramatize the following dialogue:
L; What of the world's well-known economists do you know?
A.: Well, Joan Robinson (1903—1983) taught economists at England's Cambridge University for more than 40 years.
Her book «The Economics of Imperfect Competition» (1933), led her to be recognized as one of the world's foremost economists.
L.: Taking their cue from Alfred Marshall, economists of the
1930rs based their theories on the concepts of perfect competition and monopoly.
A.: Did perfect competition often occur?
L; No it didn't. Perfect competition, with its many buyers and sellers, all of whom had perfect knowledge of market conditions, rarely occured. Neither for that matter, did perfect monopoly wherein buyers, unable to find substitutes paid a price selected by the monopolist. What usually happened was something in between the extremes of
perfect competition and monopoly.
AIn what way did Professor Robinson refer to this kind of trade?
L: She referred to this kind of trade as imperfect competition. Robinson's «Imperfect Competition» described markets in which sellers had more freedom to determine prices than they would have under perfect competition, but less than they have under pure monopoly- They had this freedom either because their products were sold under conditions of monopolistic competition, or oligopoly. Are there any weaknesses of capitalism?
A.: Joan Robinson regarded imperfect competition as a major weakness of capitalism. Why? By commanding a higher
price than they might have under perfect competition, she said, businesses earn higher returns while consumers have to find ways to do with less. Meanwhile, the economy operates at levels under its capacity to employ workers and produce goods and services.
L: She concluded that conditions of underproduction and unemployment inevitably lead to periodic recessions and political unrest.
IX. Make up your own dialogue using the following expressions:
| perfeci competition to accomplish a goal to be engaged in the same business to be interested in controlling as much of a market | to enter the market single management collusion merger |
X. Change the following sentences using the Passive Voice according to the model:
M o d e l : The vertically integrated firms are now buying raw materials from the companies they own.
Raw materials are being bought now by the vertically integrated firms.
1. Patent protections are creating another barrier to trade, 2. Privately owned firms are providing an essential public service, 3. Consumers and producers are exchanging the goods in many competitive markets at this time. 4. Businesses are developing a service now. 5. The ice-cream company is driving down the prices.
XI. Replace the infinitives in brackets by the Present Continuous Tense (the Passive Voice):
1. Higher returns (to earn) by business. 2. The principal kinds of market structures (to describe) now. 3. The customers (to treat) in the best way. 4. The wealth (to use) to dominate the oil market at this time. 5. The patent holder (to pay) now for permission to use the process or find a new method of production not covered by existing patent.
XII. Translate info English:
1. Книжка друкується, доки він читає газету. 2. Ціни знижуються ними в цей час. 3. Його товар продається зараз в умовах монополістичної конкуренції. 4. Де той чоловік? Його наймають на роботу, 5. Однакові послуги надаються і товари продаються зараз різними фірмами,
XIII. Communicative situations:
1. Mergers of two or more competing firms, as weil as of firms that are in competition with one another, have been increasing in recent years. We know that new investment adds capacity to the supply of goods and services. It also may increase competition. Expansion by merger, on the other hand, does not add to supply or capacity, and It may reduce competition. Mergers, however may result in greater efficiency in the future.
a) Explain how mergers may result in greater efficiency,
b) Support the argument that mergers lead to greater inefficiencies,
c) When would you favor, and when would you oppose, mergers?
2. General Mills is, among other things, a major producer of breakfast cereals, ALCOA produces aluminum, and Lovitt Farms, Inc, is a major wheat grower. With respect to each of these firms, compare:
a) The market in which they operate,
b) The relative importance of price in their respectivemarkets,
c) The extent to which product differentiation and price leadership are factors in their markets.
Lesson 9 MONEY
I. Read and memorize the following words, word- combinations and word-groups:
fluctuation — коливання
e.g. In societies where value of money fluctuates people
spend it immediately thinking ft will be worth less tomorrow, to hoard — запасати, накопичувати
e.g. In societies where value of money fluctuates people
hoard it in the hope that its value will increase, portability — портативність
durability — міцність uniformity — однаковість; однорідність
e.g. Money should possess such features as portability,
durability, uniformity.
dollar bill — доларова банкнота
e.g. If dollar bills had no equal denominations of money
that had the same value, things could be pretty confusing, medium of exchange — спосіб обміну
e.g. Money serves us as medium of exchange.
measure of value — міра цінності
e.g. Money serves us as measure of value,
to enable — давати право або можливість (що-небудь
робити)
e.g. Money enables us to state the price of something in
terms that everyone can understand.
II. Give English equivalents of the following;
бути небезпечним для економіки бартерна економіка головна перевага грошей встановлювати ціну накопичення цінностей робити покупку
високоякісний папір засіб обміну вартість грошей валюта
мірило цінності
IIІ. Fill In the blanks with appropriate words:
1. Money can be anything, that is generally denomination accepted in for goods and services. payment
2. Equal .of money should have the same paper money value. medium
3. One of the principal ... of money over advantages barter is its ability to be divided into barter economy
parts. money econo
4. The principal difference between a ... and my a ... is that in a barter economy you must
find someone who has what you want and
wants what you have.
5. Money, therefore, is the ... that enables exchanges to be made easily.
6. The money you are most familiar with, currency, consists of the ... and coins that you use almost daily.
IV. Read and translate the text:
What is money? Money can be anything that is generally accepted in payment for goods and services.
Although anything can serve as money, as a practical matter the material should possess the following qualities:
Stability. The value of money should be more or less the same today as tomorrow. In societies where value of money
fluctuates (goes up and down) people will hoard it in the hope that its value will increase, or spend it immediately
thinking it wit! be worth less tomorrow. Either action could be harmful to the economy.
Portability. Modern money has to be small enough and light enough for people to carry. Bowling balls would not be a practical form of money.
Durability. The material chosen has to have a reasonable life expectancy. For that reason most countries use a very high quality paper for their money.
Uniformity. Equal denomination of money should have the same value. It's easy to see that if some quarters or dollar bills were worth more than others, things could be pretty confusing.
Divisibility. One of the principal advantages of money over barter is its ability to be divided into parts. In other words, while making change for a dollar is easy, making change for a
chicken is more difficult,
Recognizability. Money should be easily recognized for what it is and hard to copy. The quality of the paper and the
engravings make paper money extremely difficult to counterfeit.
We can also define money by what it does, which is to provide: A Medium of Exchange; A Measure of Vaiue;
A Store of Value.
A Medium of Exchange. The principal difference between a barter economy and a money economy is that in a barter economy you must find someone who has what you want and wants what you have. In a money economy people can sell
what they have to anyone and use the money to buy what they want. Money, therefore, is the medium that enables exchanges to be made easily.
A Measure of Value. Money enables us to state the price of something in terms that everyone can understand. We can say the eggs we have for sale are worth 85 cents a dozen. That is far simpler than having to figure out how much milk or meat or clothing we would expect in payment for a dozen eggs,
A Store of Value. Money enables us to use the value of something that we sell today to make a purchase sometime in the future. For example, our egg seller could put the money from the day's sale toward a college education sometime in the future. You can imagine the difficulties if that person tried to save one or two year's worth of eggs toward a college education.
Currency. The money you are most familiar with, currency, consists of the paper money and coins that you almost use daily (pp. 125—127),
V. Answer the following questions:
1. What is money?
2. What qualities should the material for money possess?
3. What is the principal difference between a barter economy and a money economy?
4. What functions does money play in the society?
5. What is currency?
VI. Define the terms:
stability durability divisibility portability uniformity recognizability
VII. Translate into English:
1. Більшість країн використовує високоякісний папір для виготовлення грошей, 2. Одна з головних переваг грошей над бартером — це те, що гроші можна ділити на частини. 3. Головна різниця між бартерною та грошовою економікою полягає в тому, що при бартерній економіці вам слід шукати когось, хто мав би те, що ви хочетеf і хотів би те, що ви маєте. 4. Гроші дають нам змогу встановлювати ціну товару. 5. Гроші — це засіб, що дає нам можливість робити обмін. 6. Гроші дають змогу нам робити покупки коли-небудь у майбутньому, використовуючи вартість чогось, що ми продаємо сьогодні. 7. Валюта — це паперові гроші та монети, якими ми користуємося майже щодня.
VIII.Read and dramatize the following dialogue:
A.: In what currency wiii payments be made?
6.: We'll provide for payments in local currency in our contract.
A.: Is currency conversion allowed under your local legislation?
S.: Yesf it is.
A.: How will currency fluctuations be taken into account?
8.: To avoid currency tosses we shall provide for a currency clause in our contract.
A.: How will the currency be exchanged?
8.: At the rate of the day.
A.: To avoid currency losses we suggest including into the contract a currency clause pegging the currency of payments to SDRs in US dollars.
B.: No objections. And in what cases will payments be adjusted?
A.: Payments will be adjusted if the cost of one SDR changes.
В.: We believe that you will use the adjustments of the International Monetary Fund.
A.: Yes, certainly. Please note that if the amount of the letter of credit is not sufficient the Customer will have to increase the letter of credit accordingly,
IX. Make up your own dialogue using the following expressions:
| local currency | currency fluctuations |
| to exchange currency | to make payments |
| to provide for payments | to take into account |
| to adjust payments | to avoid currency losses |
X. Put the infinitives in brackets in the Past Continuous Tense:
M o d e l : The company (to raise) prices for the merchandise the whole year.
The company was raising prices for the merchandise the whole year,
1. The management (to consider) the outflow and inflow of capital, while they produced the new types of devices. 2. The company (to buy) currency from the foreign exchange department, when they dealt with the foreign firm. 3. Our partner (to provide) for payments in local currency, when currency conversion was allowed under the local legislation. 4. Our bank (to make) loans to corporations when they were in need. 5. The bank (to accept) money from depositors at that time.
XI. Paraphrase the following sentences as in the model:
M o d e l : He intended to convert American dollars to Swiss francs in foreign exchange departments.
He was going to convert American dollars to Swiss francs in foreign exchange departments.
1. We intended to buy merchandise from another country using the currency of that country. 2. Our bank intended to accept money from depositors. 3. This bank intended to make loans to corporations. A, We intended to provide for a currency clause in our contract, 5. I intended to invest money into this corporation.
XII. Translate into English using the Past Continuous Tense (the Active Voice):
1. Цей банк надавав позики нашій компанії з 1995 по 1999 роки. 2. Я мав намір обміняти валюту в пункті обміну.
3. У цей час вони намагались уникнути грошових втрат. 4. Коли вона зателефонувала, ми розмовляли про фонди підприємства. 5. Ми мали намір виплатити всі борги до початку фінансового року.
XIII. Communicative situations:
1. Money is the root of all evil.
2. Money is the guarantee of security,
3. Time is money.. (B. Franklin)
4. Money put in a bank is as safe as anything in this world can be.