Text 7. Goods and Services

It takes land, labour, and capital that are used by an entrepreneur to produce goods and services that will ultimately be used to satisfy our wants. Goods are tangible, meaning they are something that can be seen or touched. The production of goods requires using limited resources to produce in order to satisfy wants. An example might be a farmer who grows grain. The farmer uses farm equipment manufactured from resources; ground is a natural resource that is used to grow the grain; and because the growth of grain depletes the nutrients in the soil, the farmer must use fertilizers to restore the nutrients. Limited resources are used to produce natural or chemical fertilizers, but they are necessary for crop production. Water might be used to irrigate the crop and enhance production. When the crop is ready for harvest, the farmer uses additional resources to complete the process - equipment, gasoline, labour, and so on - which results in a good that can be used or sold for use by others.

Services are provided in numerous ways and are an intangible activity. There is no doubt that one can often see someone providing a service, but the service is not something that someone can pick up and take home to use. An example of a service is a ride in a taxi through a crowded city. It takes resources for the owner or driver to provide the service, and a passenger is consciously aware of riding in a taxi. When the ride is completed and the provider has been paid, the passenger does not have anything tangible to hold except the receipt. However, resources have been used to provide the service. The automobile used as the cab, the fuel used to operate the cab, and the labour of the driver are all examples of resources being used to provide a service that will satisfy a want.

It is important to understand that because goods and services utilize resources that are limited, goods and services are also scarce. Scarcity results when the demand for a good or service is greater than its supply. Remember that society has unlimited wants but scarce resources. It is scarcity, then, that causes consumers to have to make choices. If individuals cannot have everything they want, they must decide which of the goods and services are most important and which they can do without.

 

Exercise 48. Give English equivalents.

Задовольняти бажання, матеріальний, нематеріальний, виробництво товарів, обладнання, вичерпувати поживні речовини, добрива, відновлювати, зрошувати, покращувати, надавати послугу, квитанція, пальне, використовувати.

 

Exercise 49 . Answer the questions on text 7.

1. What does an entrepreneur use to produce goods and services? 2. What does the word “tangible” mean? 3. What does the production of goods require? 4. Why are services intangible? 5. Why are goods and services scarce? 6. What causes consumers to make choices?

 

Exercise 50 . Match terms on the left with the definitions on the right.

Term	Definition
1. goods	a) perceptible by touch
2. services	b) make available for use
3. tangible	c) the desire of consumers, clients, employers, etc. for a particular commodity, service, or other item
4. intangible	d) things that are made to be sold
5. supply	e) unable to be touched or grasped; not having physical presence
6. demand	f) the amount of a good or service offered for sale
7. provide	g) the action of helping or doing work for someone

Exercise 51. Put questions to the underlined words and phrases.

1. The production of goods requires using limited resources to produce in order to satisfy wants. 2. Water might be used to irrigate the crop and enhance production. 3. Resources have been used to provide the service. 4. Goods and services utilize resources that are limited. 5. Scarcity results when the demand for a good or service is greater than its supply. 6. If individuals cannot have everything they want, they must decide which of the goods and services are most important and which they can do without.

 

Exercise 52. Translate into English.

1. Підприємець використовує землю, працю та капітал для виробництва товарів та послуг. 2. Товари нематеріальні, що означає, що їх неможливо побачити чи відчути на дотик. 3. Обмежені ресурси використовуються для виробництва природних і хімічних добрив, але вони необхідні для вирощування сільськогосподарських культур. 4. Послуги надаються багатьма шляхами і вони є нематеріальною діяльністю. 5. Дефіцит виникає, коли попит на товар або послугу вище, ніж його пропозиція. 6. Дефіцит змушує споживачів приймати рішення.

 

Exercise 53. Learn the following words and word combinations.

supply	– пропозиція
opportunity cost	– альтернативна вартість
equilibrium	– рівновага, баланс

 

Exercise 54 . Read, translate and give the gist of text 8.

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