Pre-reading Activities. Match the words on the left with those on the right

Match the words on the left with those on the right. Then translate the expressions into Russian.

1. make	a. costs
2. scarce	b. choice
3. opportunity	c. money
4. available	d. decisions
5. financial	e. cost
6. earn	f. land
7. sell	g. alternatives
8. career	h. resources

Reading

Read the following text and be ready to explain what “opportunity cost” means.

Economists are concerned with how we make choices in a world of scarce resources. Individuals, families, business firms and governments must make decisions about how best to allocate limited resources. But when resources are limited, choices are limited as well. This means that the decision to have one thing is, at the same time, the decision not to have something else. Suppose, for example, that the government chose to pay for the increase in the size of its air force with the money it had saved by building fewer schools. In that case the increase in defense was paid for by a reduction in the number of schools.

So, the opportunity cost of any decision is the value of the next best alternative that is given up. The concept of opportunity cost was first developed by John Stuart Mill. It is a key concept in economics. It has been described as expressing the basic relationship between scarcity and choice. The notion of opportunity cost plays an important role in ensuring that scarce resources are used efficiently.

It is important to understand that opportunity costs are not restricted to financial costs, but lost time, pleasure or any other benefit that provides utility should also be considered as opportunity costs.

Assessing opportunity costs is fundamental to assessing the true cost of any course of action. However, opportunity cost is not the sum of the available alternatives when those alternatives are mutually exclusive to each other. The opportunity cost of the city’s decision to build the hospital on its vacant land is the loss of the land for a sports center, or the inability to use the land for a parking lot, or the money which could have been earned from selling the land, as using any one of those purposes would prevent the possibility to implement any other. It is also the cost of the forgone products after making a choice.

In the science of economics the concept of opportunity cost has a wide range of applications, including a consumer choice, production possibilities, cost of capital, time management and a career choice.

Comprehension Check

1. Agree or disagree with these statements about the text.

1. When resources are limited, our choices are not limited.

2. The opportunity cost of any decision is the value of the next best alternative that is given up.

3. The concept of opportunity cost is a key concept in economics.

4. The concept of opportunity cost was first developed by Alfred Marshall.

5. Assessing opportunity costs is fundamental to assessing the true cost of any course of action.

2. Complete the sentences using the information from the text.

1. The concept of opportunity cost has been described as ………

2. It is important to understand that opportunity costs are not restricted ………

3. Opportunity cost is not the sum of the available alternatives ………

4. Opportunity cost is also the cost of the forgone ………

3. Choose the sentence which best explains the role of opportunity cost in economics.

A. In the science of economics the concept of opportunity cost has a wide range of applications.

B. The concept of opportunity cost is a key concept in economics and it plays an important role in ensuring that scarce resources are used efficiently.

C. The decision to have one thing is, at the same time, the decision not to have something else.

Vocabulary Focus

1. Match the words on the left with their synonyms on the right.

1. scarce a. evaluate

2. economize b. save

3. costs c. price

4. assess d. limited

5. cost e. expenses

2. Use the words from the list of Useful Vocabulary to complete the sentences.

1. Those who make financial contributions to firms for the ..... of earning profit are known as investors.

a. growth

b. purpose

c. supply

2. Good managerial work is of great ….. for obtaining high profits.

a. value

b. opinion

c. scarcity

3. In a free market economy producers try to ….. all consumers’ tastes.

a. prevent

b. demand

c. satisfy

4. Opportunity ….. are to be calculated for labor and financial capital used in production.

a. costs

b. decisions

c. choices

5. The purpose of governmental regulations is to allocate ….. resources rationally.

a. expensive

b. efficient

c. scarce

3. Give the English equivalents to the following expressions.

развивать концепцию

играть важную роль

дефицитные ресурсы

управление временем

выбор потребителей

оценить стоимость

Talking Points

1. Try to explain the term “opportunity cost” in your own words.

2. Discuss the following issues in small groups and then report your findings.

a. What is the opportunity cost involved in a decision to continue education after finishing school?

b. What was the opportunity cost of your latest major purchase?

Summary Points

1. Revise the list of basic steps in summarizing.

1. Skim the original text and identify its main idea.

2. Divide the text into logically completed parts.

3. Read the text again and draw up an outline of the text.

4. Give a one-sentence summary of each item of the outline in your own words.

5. Find in the original text the most important details that may be added to support the main points.

6. Use appropriate words and phrases to show the logical connection between the parts of the summary.

2. Divide the phrases for summarizing into 3 groups and fill in the table.

Introduction	Main Body	Conclusion

The author comes to the conclusion that ………

Thus ………

The author thinks that ………

According to the author………

On the one hand ……… on the other hand ………

The text deals with ………

The basic topic is ………

The author notes that ………

After reading the text we realize the fact that ………

3. Summarize the text from Reading. Use phrases for your summary from Task 2.

UNIT 7

MONEY

Lead-in

Pre-reading Activities. Match the words on the left with those on the right - student2.ru 1. Do you agree with those who say that time is money? Give your arguments.

2. In your opinion, what’s the best way of making a lot of money?

3. In our everyday lives we often refer to “money” as one of three things: coins and paper money (currency); a person’s wealth; a person’s income. Using this vocabulary and working with a partner, try to define the term ‘money’.

Key Vocabulary

1. Study the following vocabulary.

1. transaction n	сделка
2. commodity money	товарные деньги
3. fiat money	неразменные деньги (деньги, не имеющие реального обеспечения в форме драгоценных металлов)
4. coin n	монета
5. value n	ценность, стоимость
6. checking account	текущий счёт (в банке)
7. savings account	сберегательный счёт
8. exchangeable adj	подлежащий обмену
9. durable adj	постоянный, с длительным сроком службы
10. valuable adj	имеющий ценность
11. medium of exchange	средство обмена
12. facilitate v	облегчать, способствовать
13. barter n,v	товарообмен; менять, обменивать
14. store of value	средство сбережения
15. unit of account	мера стоимости (единица измерения)
16. purchase v	покупать, приобретать
17. to conduct a transaction	проводить торговую операцию, сделку
18. supplier n	поставщик
19. purchaser n	покупатель
20. eliminate v	устранять
21. division of labour	разделение труда