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Архитектура Аудит Военная наука Иностранные языки Медицина Металлургия Метрология Образование Политология Производство Психология Стандартизация Технологии |
Text 1. History of economic thoughtСтр 1 из 15Следующая ⇒
Unit 1 Text 1. History of economic thought Economic thought goes back thousands of years. The ancient Greek, Xenophon, used the word oikonomikos (from oikos, meaning/amily, household, estate, and nomos, for usage, law). He was talking about skilful or clever ways to man; land and households. We could call many of Aristotle's political writings economics, although he did not use the word. The English word economics first appeared in the 19th century -two and a half thousand years after Xenophon. Early economic thought was all about the meaning of wealth or being rich. These early thinkers asked, 'what makes a state or a country wealthy? ' For nearly 2, 000 years, the answer was very simple: gold. A country or nation' wealth depended on its owning precious metals. This simple view of the economy remained um medieval times. During medieval times - roughly the period between 1100 and 1500 AD, trading between nations grew, and a new social class appeared, were merchants, people who made their money through the buying and selling of goods, and they began to write their own thought on the economy. The saw the economy as a way to make the state strong. For them, the nation's wealth depended on stocks of gold and the size of the population. More people meant bigger armies and a stronger state. These were still simple ideas. However, daily experience had also taught people many basic economic concepts. For example, they understood the importance of trade with other states. They realised that scarcity makes things more expensive and abundance makes them cheaper. Modern economics was really born in the 19th century. At this time, thinkers like Adam Smith wrote down ideas that are still important today. Adam Smith is often called the Father of Modern Economics, although the science was called political economy then. Smith realised that a nation's wealth depended on its ability to produce goods. The value of these goods depended on the cost of production. The cost of production depended on the cost of workers, raw materials and land. This was really the first example of macroeconomics. Smith and other classical economists were writing at a time of great change. The industrial revolution had begun. Paper money began to replace precious metals. The middle classes were growing stronger. Economists' theories echoed these changes. They wrote about the division of labour (each worker taking their part in the production process). They discussed the problems v population growth. They influenced thinking about social classes. For classical economists, the value of goods depends on the cost of production. However, the price of goods is not always the same as their real cost. Later economists developed new theories to explain this weakness in classical economics. These are known as the neoclassical economists and they were writing at the end of the 19th and Iv 20th centuries. In neoclassical economics, supply and demand the economy work. In other words, the of goods depends on how much people want them and how easily they can be found. Consumers want satisfaction from their (time and money). Firms want profit. In neoclassical economies, this is the basic in the economy. These ideas are still the basis of economic thinking today. Exercises Now read the text again and decide whether these statements are true or false. 1Aristotle did not use the word economics, but he did write about economic ideas. 2Early economists thought that a nation without gold was poor. 3People in medieval times didn't understand anything about economics. 4 In classical economics, the value of something was measured in gold. 5 Economists later found a problem with the classical model. 6 In neoclassical economics, supply and demand control price.
Exercises 1 Complete each sentence with a word from the box. ■ authorities ■ emancipation ■ engineering ■ estates ■ feudal ■ illiterate ■ landlord/landlady ■ leap ■ peasant ■ serf ■ subsistence ■ textile 1 In a......................system, landowners owned the land and the people who worked on it. 2 The Eiffel Tower is an amazing piece of …………… 3 A person who makes their living from farming a small piece of land is often called a....................... 4 People who cannot read or write are...................... 5 Someone who owns property and rents it to others is a....................... 6 A......................was a person who belonged to the owner of land. 7 The aristocracy own large areas of land called 8......................farming means you only just manage to survive on what is produced. 9 The......................industry produces cloth, cotton and wool. 10 The people who rule the country are sometimes called the....................... 11......................is another word for jump. 12 People have to be free – their......................is necessary.
2. Now read the text again and answer these questions in your own words in the space provided below. 1 What aspects of the Russian economy increased in the 19th century? 2 Give three reasons why Russia’s economy was underdeveloped. 3 What two things helped the Russian economy grow? 4 How did ordinary people’s lives change after pecializingdon? Exercises Text 4. The mixed economy Most economists would say that there are no examples in the world today of a completely free market or a completely controlled economy. Instead, every country operates a mixture of the two systems. Even in the freest economies, like the USA, there is some government control; even in the strictest planned economy there is some free enterprise. Economies mix government control and free market values in different ways. One way is to let privately owned businesses exist alongside state run industries. The economy becomes divided between the state sector and the private sector. The state sector often includes industries that the government thinks are important and need protection from the risks of the free market. These could include public transport, hospitals, schools and the postal service. The state sector can also include large industries that arc important for a country’s economic health, such as oil, steel or agriculture. These are sometimes called primary industries because they provide basic materials to manufacturers. These state sector industries use money that the government collects in taxes. Often, they do not need to compete with other companies because no other company is allowed to provide the same product or service. However, many countries have recently started a process called deregulation. Deregulation means freeing up the economy to allow private businesses to compete with state-run industries. The state sector should then run more efficiently in order to compete in the free market and because it now has less government protection. Deregulation of services like telecommunications, transport and banking has happened in many countries in recent years. People have generally accepted these changes. However, generally the public is less happy when governments start talking about deregulation in education and health services. Many people feel that profit motivation will harm these services rather than improve them. Another way in which economies today are mixed is that governments put limits on free enterprise. For example, governments may decide to ban trade in certain goods if they are dangerous. They may also create laws to make sure companies trade honestly or to prevent monopolies. If a company has a monopoly, normal market forces do not affect it. This is bad for consumers and the economy in general. Governments may also regulate methods of production. They do this to guarantee that products are safe for consumers and to protect the environment. Many economists would argue that the mixed economy is the best system for consumers. This is because consumers have two ways to control the economy: by choosing to buy a company’s goods or services and by choosing to give political parties their votes. Exercises Text 5. Welfare economics Behind the numbers, charts and formulas of economies, there are people. This is sometimes easy to forget. Economies isn’t only about profits, losses and utility. It’s about society. Economic ideas and theories often seem to be issues that are far removed from people’s everyday lives. Welfare economics, however, tries to correct this. It looks at how economic policies affect society, families and the individual. One of the big issues in welfare economics is equity. Equity means fairness, and welfare economists are interested in measuring how fair our economic systems are. One way they do this is to look at how income and wealth are distributed among the population. Welfare economists also investigate the effects of government policy on equity. Governments’ main weapon to fight inequity (unfairness) is taxation. Welfare economists try to find out how taxation affects vertical equity and horizontal equity, which are two ideas that taxation systems can be based on. The idea behind vertical equity is that people with more income will pay more than those with less income. The idea behind horizontal equity is that people with the same income will pay the same amount of tax. Ideally, a tax system will have both vertical and horizontal equity. However, some economists feel that any kind of taxation on people’s earnings is unjust. They believe it is unfair to peciali entrepreneurs and hard-workers. Why should people who are less able or less hard-working be supported by others? In this view of welfare economies, inequity is a natural feature of every economic system. Trying to create equity, they say, is just a waste of time. Instead, it is better to make economic systems more efficient. A more efficient economy grows faster and everyone in society benefits. Welfare economics isn’t only about the fairness of economic systems. It’s also about the impact that economic choices have on our lives. Economic transactions often affect other people who are not directly involved in those transactions. Economists call these results externalities. Externalities are sometimes good and sometimes bad for society. For example, pollution is a negative externality of the car industry. But cars give people better mobility, which is a positive externality of the same industry. Production is not the only cause of negative externalities for society. Many are due to our use or consumption of goods. People’s litter in parks and on beaches is one example; noisy neighbours playing their CD player loudly is another. These are both examples of externalities causing pollution. However, health problems from smoking and drinking alcohol are also externalities from economic transactions. These have a cost for individuals, but also for society as a whole. Exercises Text 6. Economic growth Many millions of people enjoy a quality of life today that previous generations could not have dreamed of. Home ownership, private cars and holidays are now standard for most families in pecializingd countries. And yet at the same time, billions of people in other countries live without even clean drinking water. How can this be? The answer is that the fortunate few live in countries with sustained economic growth. An economy is growing when the gross national product is increasing year after year. When economists calculate economic growth, though, they must take into account the effects of inflation. For example, imagine that the gross national product of a country increased from $500 billion to $510 billion from one year to another. That’s an increase of two per cent in output. Very impressive! However, if the rate of inflation was two per cent, then there has been no real growth at all. The other thing to remember about economic growth is that not all growth is good. Governments want steady, sustainable growth. Sudden, sharp increases in growth – a boom – can cause the economy to overheat and fall into recession. For many economies, the long run growth over many years is steady, but the short run is a roller-coaster ride of boom and depression. For instance, the long run growth of the UK economy since 1950 has been a steady 2.5% per year. However, if you look closely at any decade you’ll see that there is a cycle of growth, recession and recovery. The truth is, steady growth in the short term is very hard to achieve. Nevertheless, many countries are still struggling to achieve any kind of growth at all. Why is this? What is necessary for growth to happen? Many economists have tried to find the answer to this question, and there are plenty of theories to choose from. However, most economists agree that three things are essential for economic growth to occur: capital growth, savings and technological progress. Capital refers to the factories and machinery that the labour force uses to turn raw materials into products. More workers and more raw materials will only lead to a certain amount of growth. Eventually, the economy needs more capital for the labour to use. Capital growth can also include training and education for the labour force. This makes the workforce more efficient, creative and productive. Of course, someone has to pay for the new machines and training. In other words, capital growth needs investment. Money for investment needs to be borrowed from banks. Banks can only lend if customers make savings. This is why savings are so important for growth. However, the economy will not grow if everyone is saving and no one is spending. Getting the right balance between consumption and saving is another part of the challenge of economic growth. But above all, technology is the real miracle worker of economic growth. An advance in technology can increase productivity from the same amount of capital and resources: just what the chancellor ordered! Exercises PARAGRAPH 4 A The majority of economists believe three factors positively influence economic growth. B Economists are sure about what causes economic growth. C Economists have no idea about what causes economic growth. PARAGRAPH 5 A_ The economy needs more raw materials to grow. B The economy needs more machines and factories in order to grow. C The economy needs more labour to grow. PARAGRAPH 6 A For economic growth there needs to be more spending and less saving. B For economic growth there needs to be more saving and less spending. C For economic growth there needs to be the right amount of saving and spending. PARAGRAPH 7 A Technology creates more raw materials with less labour. B Technology creates greater output from the same amount of capital, labour and materials. C Technology creates more labour with fewer raw materials. Text 7. The open economy
All through history, people from one society have been trading with people from another. Three thousand years ago, for example, the Phoenicians of the Mediterranean built an economy almost completely on foreign trade. In the jargon of economics, the Phoenicians had an open economy, and almost every economy since theirs has been open too. When an economy is open, this basically means that it imports and exports goods and services. What are the benefits of doing this? First of all, if you trade with other economies, you can import goods that do not exist in your economy. These may be products that your economy cannot manufacture, but they may also be raw materials. With a wider range of raw materials, an economy is able to use its capital and labour to produce a wider range of products. In this way, importing can actually help an economy grow. What’s more, if you allow imports from other countries, then you will have trading partnerships. This means that you can export to countries. If you have customers all over the world, your economy will grow faster. Open economies arc good for consumers, too. If the economy allows imports from abroad, there will be a greater variety of goods available locally. When products arc available locally, imports of the same products should help to keep prices down and quality high. This is because local companies will have to compete with foreign companies, and more competition will mean better quality and greater value for money. Economists describe imports and exports of material products as visible – because you can really sec and touch them. Examples of visible exports and imports are food stuffs, furniture and electronic equipment. However, there are also invisible imports and exports. These are mainly services, but can include all sorts of things. Examples of invisible exports and imports include banking services, insurance products, educational courses and tourism. Opening up economies, however, does bring problems. One of the main difficulties is keeping a good balance of trade. Every time a country manages to sell a product or service abroad, this means money will flow into the economy. On the other hand, every time someone buys from abroad, money flows out of the country. Over time, if the flow of money out of the economy is greater than the flow of money into the economy, then there is a trade deficit. This is not a good situation to be in. The challenge for governments is to keep the flow of trade equal in both directions, or to achieve a trade surplus. This is when total exports are greater than total imports. Exercices
Unit 2 Exercises
Text 3. Macroeconomics In the 1930s one of the world’s strongest economies suffered a devastating collapse. It was the American economy, and the disaster was the Great Depression. The effects of the Great Depression were felt all around the world, and it brought about a change in economic thinking. Economists began to pecial that looking at the behaviour of individual consumers and suppliers in the economy was not enough. Economists and governments had to understand how the whole economy worked. In other words, they had to have an understanding of macroeconomics. Microeconomics looks at how the details of the economy work. Macroeconomics takes a few steps back and looks at the whole picture. While microeconomics looks at supply and demand for a single product or industry, macroeconomics follows supply and demand patterns for the whole economy. Whereas microeconomics is about economic events at home, macroeconomics looks at how the domestic economy interacts with the economies of other countries. However, macroeconomics isn’t only about knowing what’s happening in the economy. After the shock of the Great Depression, governments peciali that an economy needs to be managed. Most governments aim to have steady economic growth, to control inflation and to avoid recessions. Just managing an individual business is a hard enough task. How do you manage a whole economy? Governments have certain mechanisms which help them to do this. The first of these mechanisms is fiscal policy. Fiscal policy refers to the tax system and to government spending. By increasing or decreasing the amount of tax people must pay, the government can affect how much money people have available to spend ( п disposable income). This, in turn, has an effect on demand in the market. By increasing or decreasing their own spending, governments can have a huge effect on the growth of the economy. The second mechanism is monetary policy. With its monetary policy, a government sets interest rates and also controls the amount of money that circulates in the economy. The interest rate the government sets influences the rate that commercial banks set when they lend money to customers. Interest rates have a big impact on the economy. For example, they can affect people’s decisions about saving or spending money. The third mechanism is administrative approach. This is a range of things that governments do to increase the supply of goods and services to the economy but without increasing prices. There are a number of ways governments try to do this. For example, improvements in education and training can make the workforce more productive. Investment in technology can make industry more efficient. Governments can also change employment and business laws to make the market more competitive. With a combination of these methods, governments try to steer or guide the economy on a steady and predictable path. They aim for gradual economic growth and to avoid disasters like the Great Depression. Exercises 2. Match the words and phrases with the definitions.
2. Now read the text again and answer the questions 1 Which countries were affected by the Great Depression? A only America B just America and Europe C the whole world 2 Which of the following is interested in foreign economies? A microeconomics B macroeconomics C both micro and macro economics 3 The three different mechanisms which governments use are... A all concerned with how much money people have to spend. B aimed at improving education and training. C all different ways of managing an economy. 4 Which mechanisms involve changing interest rates? A fiscal policy B- monetary policy C administrative approach 5 Which mechanisms might involve creating job training schemes for school leavers? A fiscal policy B monetary policy C administrative approach 6 What do governments want to achieve with their macroeconomic policies? A to predict what will happen in the economy B to create steady economic growth C to combine different paths for economic growth
Unit 3 Text 1. Marketing Marketing includes all the business activities connected with the movement of goods and services from producers to consumers. Sometimes it is called distribution. On the one hand, marketing is made up of such activities as transporting, storing and selling goods and, on the other hand, a series of decisions you make duringthe process of moving goods from producer to user. Marketing operations include product planning, buying, storage, pricing, promotion, selling, credit, traffic and marketing research. The ability to recognize early trends is very important. Producers must know why, where, for what purpose the consumers buy. Market research helps the producer to predict what the people will want. And through advertising he attempts 10 influence the customer to buy. Marketing operations are very expensive. They take up more than half of the consumer’s dollar. The trend in the USA has been to high mass consumption. The construction of good shopping centres has made goods available to consumers. It provided a wide range of merchandise and plenty of parking facilities.
Exercises 1.Answer the questions. 1. What does marketing mean? 2. What activities does marketing consist of? 3. What do marketing operations include? 4. Why is it so important for the producer to predict the trends? 5. How was mass consumption possible in USA? Exercises Text 3. The market economy Have you ever walked through a busy street market? People push their way through crowds of others in order to reach the stalls first. The air is full of deafening shouts. Stall owners yell to advertise their goods. Buyers cry out their orders. It’s hard to imagine, but behind this noisy confusion is a very logical economic theory: the market economy. The market economy is sometimes called the free market. A free market is not controlled in any way by a government. It is also free from the influence of custom or tradition. In a free market, the only reason why things are bought and sold is because there is a demand for them. Prices for goods and services arc simply what people arc prepared to pay. The market economy is not really controlled by anyone. It controls itself. The street market where we began has many of the characteristics of the free market. Customers arrive at the market with a shopping list of things they need. They also come with an idea of how much they are prepared to pay. Stall owners sell what customers demand, and try to get the highest price they can for it. Supply and demand control what is on the market and how much it sells for. In the wider economy, we are all customers, and the stall owners are like companies. The role of the company in the free market is to supply what people want. However, companies need an incentive. The incentive is profit. There are two ways for companies to make a profit. The first way is to raise their prices. The second way is to reduce their production costs. And this brings us to two more features of the market economy; competition and technology. Competition exists in a free market because, theoretically, anyone can be a producer. This means that companies have to compete with each other for a share of the market. Competition is good for consumers because it helps to control prices and quality. If customers aren’t happy with a product or service, or if they can’t afford it, they will go to a competitor. Technology exists in a free market because producers need ways to reduce their costs. They cannot buy cheaper raw materials. Instead, they must make better use of time and labour. Technology is the use of tools and machines to do jobs in a better way. This helps companies produce more goods in less time and with less effort. The result: more profit. People often think that most economies arc free markets. However, at the macroeconomic level, a truly free market economy does not exist anywhere in the world. This is because all governments set limits in order to control the economy. Some governments set many limits, other governments set very few, but they all set some. For this reason, a true market economy is only theoretical. Nevertheless, many of the features of the market economy do exist in most societies today. Exercises
Choose the correct answer. Adam Smith’s invisible hand theory: 1 People are naturally selfish / helpful. 2 The free market only demands what is good for society / producers. 3 When people work for their own good, they do good for consumers / society also. In the real economy: 4 In the free market there is a demand for goods which are not expensive / necessary. 5 There is also demand for goods which are good / bad for us. 6 The market / Advertising can create demands that do not normally exist. 3. Discuss these questions with your partner. -» Do you think most countries have a market which is free from government management? -» Can you think of any examples supporting or disagreeing with this idea? Text 4. The labour market In many ways the relationship between employers and workers is similar to the relationship between consumers and producers: workers offer a service (the labour they provide), employers buy that service at a price they can afford (the wages they pay). As you can see, it's a kind of market. In economics, it's called the labour market. In any market for products and services, consumers try to get the maximum utility, or satisfaction, from their purchase. This is the same in the labour market. What do companies want from their purchase of labour? What utility do they get? The answer is increased output. Output is how much of the product or service the company produces. If there is an increase in demand for their product, they will need to increase output. One way to do this (but not the only way) is to take on more staff. Another is to ask staff they already have to work more hours. In both cases, the company is buying more labour. Just like any other market, the labour market obeys the laws of supply and demand. The demand is the employers' need for labour. Supply is the labour workers provide. Just like any other commodity, there is a relationship between price and demand. As the price of labour increases, the demand decreases. You can see this shown in figure 1. The suppliers in the labour market are workers. Just like suppliers in other markets, they want ahigher price for greater supply. In other words, as supply of labour increases, they want higher wages. Again, you can see this shown in figure 1. The wage that workers get for their labour is a compromise between what they want and what companies will pay. However, there can be shifts in demand. These shifts can cause the overall demand for labour to increase or decrease at any wage rate. For example, if there is an increase in the demand for the end product or service, there will be an overall increase in demand for labour (the demand curve shifts to the right). However, if new technology can replace workers, then there will be an overall decrease In demand for labour (the demand curve shifts to the left). One more thing which affects demand for labour is workers' productivity. The productivity of a worker is how much they produce in a certain time. For example, imagine that a worker makes ten pencils an hour one day, and only eight pencils an hour the next day. This is a fall in productivity. When worker productivity falls, companies will pay less for labour. They are also less likely to employ new workers.
Exercises I. Match the words with the definitions. 1take 2 on obey 3 utility 4 output 5 compromise 6 productivity 7 afford 8 staff A employees B satisfaction or usefulness C be able to buy Di follow E amount produced in a certain time F employ more staff G both sides give up something in order to agree H what a company produces
II.Now read the text again and complete the sentences below in your own words in the space provided. I The labour market is similar to... Companies buy labour because they... 3 Workers want higher... I When the price of labour rises... Four things that cause a change in demand for labour are..,
Dialogue (Sally and Don work in the Marketing Department of company, that makes different meal products.) Don Hey, Sally, look at these figures. The price of sugar is going up 10% during the next year. Sally Oh, that’s bad. That means trouble for our jam line. Don I think so too. Sugar is the main ingredient, you know. What’s your opinion. Sally Well, we are not the price loaders in the field and jam is a very price sensitive item. According to our marketing research information consumers aren’t particularly brand loyal about jam. Don I have a brilliant idea. You know, this could be a great marketing opportunity for us. Sally What do you mean? Don Well, because of the price rise in sugar we know that the price of jam will go up too. The increase will pass on the consumer, won’t it? Sally Right. Don Imagine, we find the possibility of changing the ingredients in the jam so that we wouldn’t have to raise the price. Sally Then we wouldn’t trouble about the price rise on sugar because we’ll be able to sell the jam at the same price. The idea is that we could market less expensive jam. What a promotional campaign we could have! Don Sure. If we do it right we’ll sell more and become the leader in the market. Sally Now the first thing is to talk to Research and Development. Don Right ant we’ll see when they’ll have some samples of new formulas ready. Sally What about marketing research? I think we should schedule some tests for responses to the R& D samples. Don Well, there is a lot to do. I think we should also change packaging. Now, Sally, that would be great. Sally Oh, Don, let’s hope for the best. If we don’t lose the chance, the competitors products will stay on the supermarket shelves. Don Oh, it’s time for lunch. Let’s discuss our business in cafeteria. Sally Oh, sure, we’ve got a lot to discuss – distribution, advertising...
Exercises Text. Wholesaling Wholesaling is a part of the marketing system. It provides channels of distribution which help to bring goods to the market. Generally indirect channels are used to market manufactured consumer goods. It could be from the manufacturer to the wholesaler, from the retailer to the consumer or through more complicated channels. A direct channel moves goods from the manufacturer or producer to the consumer. Wholesaling is often a field of small business, but there is a growing chain movement in the western countries. About a quarter of wholesaling units account for one-third of total sales. Two-third of the wholesaling middleman are merchant wholesalers who take title to the goods they deal in. There are also agent middlemen who negotiate purchases or sales or both. They don’t take title to the goods they deal in. Sometimes they lake possession though. These agents don’t earn salaries. They receive commissions. This is a percentage of the value of the goods they sell. Wholesalers simplify the process of distribution. For example, the average supermarket stocks 5.000 items in groceries alone, a retail druggist can have more than 6.000 Items. As a wholesaler handles a large assortment of items from numerous manufacturers he reduces the problem of both manufacturer and retailer. The store-keeper does not have to deal directly with thousands of different people. He usually has a well-stocked store and deals with only a few wholesalers. Exercises Answer the questions. 1. What is the aim of the wholesaling? 2. How can you describe a direct channel of distribution? 3. What is an indirect channel of distribution? 4. What channel of distribution is preferable? 5. Is there any difference between a merchant wholesaler and an agent middleman? What is this difference? 6. How does a wholesaler simplify the process of distribution? 7. What would a retailer have to do without wholesalers? Exercises Unit 5 Text. Retailing
Retailing is selling goods and services to the ultimate consumer. Thus, the retailer is the most expensive link in the chain distribution. Being middlemen, they make their profit by charging the customer 25 to 100 per cent more than the price they paid for the item. The retailers operate through stores, mail-order houses vending machine operators, there are different types of retail stores: department stores, discount houses, cooperative single line retailers. The major part (over 95 per cent) of retail establishments concentrate on a single line of merchandise for ample, food, hardware, etc. But nowadays there is a trend for many single line stores to take on a greater variety of supplies. The retailer performs many necessary functions. First, he may provide a convenient location. Second, he often guarantees and services the merchandise he sells. Third, the retailer helps to promote the product through displays, advertising or sales people. Fourth, the retailer can finance the customer by extending credit. Also the retailer stores the goods in his outlet by having goods available.
Exercises
1. Answer the questions. 1. What is retailing? 2. What are four different types of retail stores? 3. What are at least two types of retailing that do not include the use of a store? 4. In what way does a retailer serve a customer? 5. In what way does a retailer serve a manufacturer? 6. Which per cent of the price of the good sold goes to the retailer? 7.What is the trend with a single line retailer now?
2. Put the necessary word in the sentence. 1 — is one function a retailer may perform. 2. You can buy newspapers, cigarettes, cookies from a.... 3.... is the most expensive link in the chain between a producer and a consumer. 4. The firm... good quality of the product. 5. She doesn’t like to go shopping, she prefers to do it by.... 6. The department store is having a sale and there is a 20 per cent... on all light dresses. 7. Wholesaler is an important... between a producer and a consumer. A mail-order B discount C vending-I machine D guarantees E retailer F extending I credit G link
Dialogue (Jean has just moved into a new house. Her neighbour, Liz, has come over to welcome her.) Jean I am very glad to see you here. Liz How do you like the new place? Jean It’s marvelous. 1 am sure we are going to love living here. Liz Well, have a look, here it’s a shopping guide for the neighbourhood and a booklet of discount coupons. New neighbours always receive them. There is one coupon for every store in the shopping guide. Jean Oh, thank you. It’s come in time. I have a lot of shopping to do. Liz I can imagine, having just moved in. Not far from here there’s a very good shopping center. You can also find a huge supermarket, a drugstore, some department stores in the neighbourhood. Jean Great. Are there any small stores nearby? Liz Oh, yes. The map is right here in the shopping guide. There is a little drugstore a few blocks away, a little grocery store next to it, a little boutique, an ice cream parlor, a pizza place. You can find a plant store not far from here too. Jean Are there any good discount houses nearby? We terribly need a new toaster. Everybody in my family likes toasts for breakfasts very much. I’d like to buy it. Liz Oh, sure. There is a good discount store in the shopping center. If you like, I’ll come with you. Jean Oh, you needn’t. I don’t want to trouble you. Liz No trouble at all. I’d like to do some shopping too. If we go to the discount center I can go to that little cheese shop. I don’t want to bother you. Jean It’s no bother at all. Make out your shopping list and I’ll be your guide. By the way, you can use your discount coupon for the toaster. Liz I am sure you’ll buy a good one. Jean Well, it’ll take some time to make a shopping list. I’ll have to buy a lot at the grocer’s. Liz This is a good idea. I should have gone shopping yesterday, so I’ll make up my list too. Jean By the way, I like your dress very much. It’s a perfect fit. Where did you buy it, if you don’t mind my asking? Liz Thank you for compliment. I got it at a very nice little boutique. It’s a bit expensive, but there are many interesting and original things. If you are interested we can stop there. Jean I’m afraid I can’t. I have to cook dinner. Liz Oh, don’t trouble yourself with the dinner. Look over the coupons I’ve given you. You can go out to dinner at a discount store. Exercises 1. Change the sentences according to the model. Model: My wife usually asks the children to do shopping. My wife usually makes children do shopping.
1. He’ll ask single line retailers to take part in the promotion campaign. 2. The chief usually asks his immediate subordinates to perform different functions. 3. It’s necessary to ask him to recognize his wholesaling units. 4. It’s important to influence ultimate consumer to buy this product. 5. Ask him to buy all these things in the discount house.
2. Make responses to the sentences according to the model. Model: I want to ask your brother to do shopping today. Let me do shopping today myself. 1.1 want my secretary to prepare the financial statement. 2. The board of directors wants the officers to plan product development. 3. He wants to speak with my friend about their possible partnership. 4. I want a lawyer to clarify this matter.
5. The executive wants this manager to start market research.
3. Answer the questions. 1. What kind of shops in this country do you know? 2. What shops are situated not far from your house? 3. What goods can be bought there? 4. What specific features do channels of distribution have in country? 5. What reforms does this country need to reorganize the channels of distribution?
Unit 6 Text. Price discrimination The market price for a product is like a signpost for companies. It shows them more or less what people are prepared to pay. Nevertheless, companies can set their prices just above or just below the market price if they want. They can even choose to ignore the market price completely. In the real world of business, setting prices involves skill, guesswork and risk-taking. Companies have lots of pricing tricks which help to increase profits. One of these tricks is price discrimination. Price discrimination means charging a different price for the same product to different customers. For example, you walk into a shop and buy a CD for? 15. A few minutes later, I walk into the same shop and buy another copy of exactly the same CD. This time, the shopkeeper charges me? 20! That’s price discrimination. There are different types, or degrees, of price discrimination. First degree price discrimination is when almost every consumer pays a different price for the same product. How can this happen? Remember that the demand curve slopes downward. In theory, every consumer has their own point on the curve. In other words, each person values the product differently. You may think that an Elton John CD is worth? 20, whereas I think it’s only worth 50 cents! We are on different points on the demand curve. With first degree discrimination, each consumer will pay what he or she thinks the product is worth, and sellers charge each person accordingly. This all sounds great, but it is not usually practical in the real market place. Nevertheless, it is sometimes possible. An auction, for example, works in this way. In an auction, each consumer makes a bid for the product, and the highest bid wins. In this way, the product is sold at a price that the buyer thinks is right. Auctioning is becoming more and more common on the World Wide Web, and auctioning websites have become very big business. Second degree price discrimination is more common than first degree discrimination. It involves changing price according to how much of the product is sold. For example, if a customer buys three pencils, they pay one euro per pencil. If they buy 300 pencils, they pay only 75 cents per pencil. This is a kind of reward for buying large amounts. This kind of discrimination is important for retailers. It allows shopkeepers to buy goods in bulk from wholesalers at lower prices. Shopkeepers then add a markup price when they sell the goods on to ordinary customers. What about third degree price discrimination? This is when certain types of customer are charged different prices. For example, pensioners and students often get discounts on public transport or for arts events. These people cannot afford the normal market price. By offering discounts, companies widen their market share but still make a profit. Exercises
PARAGRAPH 1 Thank your friend for his/her last letter. Make a comment about news that they told you in their letter. Tell them your news. PARAGRAPH 2 Describe your idea for an Internet commerce site. What product will you sell / what service will you provide? PARAGRAPH 3 Explain how you got the idea. Say why you think it will work.
Dialogue Dick introducing a new line of products and is talking to his friend Tom, a business consultant, about it. Dick It’s the first time when I’m in business for myself. Tom Don’t worry. The store has always been doing well. It has a great location and as far as your new line of merchandise... Dick That’s what I wanted to talk to you about. Can you give some ideas how to charge the prices? With pleasure. Generally, there are two types of pricing policies. There is price emphasis and price deemphasis. Dick What’s the difference? Tom The price emphasis policy emphasizes low prices. This encourages sales. But low price doesn’t give extra services. Dick So, a really low price means no credit, home delivery, repair, installation and other services. Tom That’s what I mean. But many people are interested only in the low price and not in the extra services. Dick Yes, and vice versa. The price which I set determines the number of sales. I must think thoroughly about it. Tom A good example of price emphasis is “loss leader” pricing. It means that you choose one item – let’s say an electric razor – at a price just above the cost. The customers will come to your shop to buy this loss leader item. But since they are inside they can decide to buy a few other things they need. Dick It sounds interesting. What other things can you tell? Tom There is also off-even pricing. Let s say sell a tape recorder for $69.95 instead of $80.00. Though it is in fact about the same, the low price can produce a favorable psychological effect. Dick What are the other ways to attract the customers? Tom First of all, remember that you are going to compete with well-known products, so you should start with specially low prices. It’s important to advertise this. You should use newspaper ads, maybe a radio spot, maybe do a big window and floor display. Dick It makes sense. Tom And you can raise the price after your customers try a new brand get to know it and like it. They will continue to buy it. Dick I see. And what is the price de-emphasis you mentioned before? Tom It concerns high quality expensive items. Price de-emphasis means that you don’t call attention to the price at all. Dick I know, it concerns our fine department or designer fashions. Tom Yes. I see you are going to do very well. Dick Your suggestions seem to be very useful. Don’t forget you have a discount on any shopping you do in my shop. Tom In such a case I’ll be back tomorrow with my wife.
Exercises 1. Change the sentences according to the model.
Model: The tape recorder is inexpensive. Your store sells Ihe tape recorder. The tape recorder that your store sells is inexpensive. 1. The dresses arc fashionable. The store introduced the new dresses last week. 2. The store has many refrigerators. Dick owns the store. 3. The stereo is high-priced. My daughter wants the stereo. 4. The price determines the number of sales. A retailer sets the price. 5. Very often the people don’t want extra services. Many supermarkets offer extra services. 6. Your shop should have loss-leader item. Loss-leader item will attract the customers. 7. Price de-emphasis works with high quality expensive items. Price-de-emphasis means that you don’t call attention to the price at all. 2. Change the sentences according to the model. Model: We won’t introduce a new line of merchandise unless you suggest it. We will introduce a new line of merchandise if you don’t suggest it. 1. Tape recorders are popular unless the price is too high. 2. The consumers will continue to buy unless they don’t like the item. 3. The buyer can get installation services unless he wants to pay for it. 4. The salesman will help you unless he is too busy. 5. People won’t try a new product unless there is advertising. 6. Customers won’t buy the new brand, unless the price is low. 7. They won’t raise the price unless it is necessary.
3. Answer the questions. 1. In what way were the prices charged in this country? 2. What is your idea of the term market price? 3. What type of pricing policy works with the majority of consumer goods? (price-emphasis, price de-emphasis) 4. What is more preferable for you in pricing: low prices with no extra services or high prices with home delivery, repair and other services? 5. Why is it so important to have loss leader item in a shop? 6. What is off-even pricing made for? 7. How can your pricing policy help to compete with well known products?
Text 1. International trade There are plenty of incentives for a country to have an open economy. Exports increase the size of the market for producers. Imports stimulate competition in local markets and provide a wider choice for consumers. These are good reasons for international trade. However, another important reason for trading is to exploit advantages. Economists talk about two types of advantage that an economy can have over others: absolute advantage and comparative advantage. An economy has absolute advantage when it can produce goods at a lower cost than other economies can, or they have resources that others don’t have. For example, warm Mediterranean countries have an absolute advantage in the production of olive oil. Many countries in Asia have an absolute advantage in manufacturing electronic goods. Clearly, it makes sense for countries with absolute advantages to trade with each other. The second kind of advantage is comparative advantage. This happens when an economy can produce something at a lower opportunity cost than other economies can. Remember that the opportunity cost of something is what you have to give up in order to have it. For example, imagine that country A makes two things with its resources: clothes and furniture. If it wants to increase production of clothes, it must decrease its production of furniture. This loss is the opportunity cost. Now imagine that country B also makes clothes and furniture, but it makes less of both than country A. In other words, country A has an absolute advantage over country B in clothes and furniture. However, country B can increase its production of clothes with only a small opportunity cost in furniture. This means that country B has a comparative advantage over country A in the production of clothes. But why would country A want to trade with country B? What benefit would they gain? In fact, both countries can benefit by pecializing. If country A produces only furniture, and country B produces only clothes, both countries will be making best use of their available resources. By trading in this way, production of both products increases. In turn, this increases the economic welfare of both countries. Despite all the advantages of having an open economy, countries sometimes restrict trade with other countries. For example, governments may charge tariffs on imports, These are taxes which make imports more expensive than locally produced products. Governments may also restrict the amount of imports entering the country. This kind of restriction is called an import quota. Since international trade has so many benefits, why would countries want to restrict trade in this way? There must be some very good reasons! Exercises Exercises 1. Answer the questions. 1. What is the origin of the multinational company? 2. When did the corporate movement begin? 3. Why did it become possible for a company to control enterprises on the other side of the globe? 4. How quickly is internationalism growing? 5. What can internationalism bring? 6. What problems can arise with internationalism? 7. What are your own answers and explanations to this problems?
2. Choose the necessary word and put it in the sentence. 1. All countries must prepare for possible energy... in the future and save fuel. 2. If you want to form a corporation today you must fulfil... operations. 3. When one deals with the currency of another country, it is necessary to know the current... exchange rate. 4.... is one factor to influence the growth of international business. 5. Some analysts state that roost of the free worlds production will be... internationalized within a generation. 6. In 1985 the... said that cooperatives could be created. 7. International corporation is very often an... of old trading companies.
A internationalized B statute C bureaucratic D14 monetary E crisis F satellite communication G outgrowth Dialogue Nick and Ann are having lunch. Nick is an executive in the international computer company. Nick Do you like the idea of taking a month’s trip to fcurope and the Far East? Ann What? You are kidding. Nick No. First of all I must say that it’s a business trip. The company wants me to visit some of our operations. I should have meetings about the new computer I am developing. They think if we combine expertise we’ll advance more quickly. Ann Oh, Nick. It’s great. Where are we going to? Nick To nine countries. We have nine development laboratories. In fact, only now I realize how largethe company is, a real global company. Ann But the company started here in America. Nick Yes. In this sense, we’re American. Each company has to be incorporated somewhere, here or in Japan or Canada or India. But our corporation is a real multinational one. Ann What does it mean then? Nick Well, we are in 126 countries and we have there 125000 employees. We do our business in 28 languages and more than 32 currencies. Our plants are situated in 13 countries and we have eight development labs. Ann Now I sec. You are multinational. But such industries as shipbuilding, aircraft, automobiles can’t survive without selling abroad. Nick Right. By the way, do you know that for the last seven years more than half of the corporation’s net income has come from overseas business. We are the part of the world community. Ann It’s exciting, isn’t it? Nick Yes, now we really can feel that nations are tied to each other through business operations. This internationalism is our hope for a better world. Ann Well it’s time to pack. Nick Later. Ann Nick, can you explain me why do you sell a computer to a company in Canada when the company has a plant in Canada? Nick Well, Ann. For example, it’s not unusual for a automobile company from Britain to manufacture automobiles in France for sale in Britain with Canadian-made engine, Swiss transmission and German axles. It’s international business. Ann But it is so complicated to sell the goods to a foreign company with different currencies and all that. Nick I can tell you how we do. Ann It’s very interesting. Nick When we deliver the machine to the shipping company, we receive a bill of lading. It’s a receipt from the shipping company and it’s also the foreign company’s claim to the computer when it gets to England. Ann And what’s then? Nick When we write draft or check which direct the British company to pay a sum in British pounds to a third parly in, let’s say, 90 days. We call it a “bill of exchange”, which includes the rate of exchange at the time and, in addition, the interest. It must be paid in the W day extension of credit. Ann That is hard time getting the money, isn’t it? Nick No. We take tin draft, the bill of lading and other necessary papers a to our New York bank. The draft is sold at discount, it means without interest change, for the face value and get dollars. That’s the way. Ann Well, but you get your money from the bank. How does the British company pay? Who do they pay? Nick It’s quite simple, New York bank sends the documents and the draft to its branch in London or to a British bank. The transaction is finished usually by accepting British pounds into a checking account in a London bank. Ann It seems rather complicating. Nick It only seems so. The US supplied a computer, exported the merchandise and got back a checking account deposit in a London bank, importing claim on British goods and services. Ann Could you have dollars instead? Nick Sure, but in this case we would have reduced the existing British claim on American goods and services. Ann So what? Nick If some nations pile up continuing capital surpluses and other continuing deficits the problem can arise in international economics.
Ann I see that I must study the subject thoroughly before we can continue. Nick Yes, may be.
Exercises 1. Use the structure of (he model 10 respond the following sentences. Unit 7 Text. TYPES OF PROPRIETORSHIP
A business may be privately owned in three different forms. These forms are the sole proprietorship, the partnership and the corporation. The sole proprietorship is the most common i n many western countries. For example, more than 80 per cent of all businesses in the United States are sole proprietorships. But it is evident that sole proprietorships do not do the greatest volume of business. They account for only 16 percent of all business receipts, for example, in America. What kind of business is likely to be a sole proprietorship? First of all, service industries such as laundromats, beauty shops, different repair shops, restaurants. Exercises 1. Answer the questions. 1. What are three different ways that a business can be privately owned? 2. What forms do most European countries have? 3. What forms do the businesses in the USSR have? 4. Name some businesses that are likely to be sole proprietorships. Why do you think so? 5. Name some businesses that are not likely to be sole proprietorship? Why do you think so?
II. Choose the necessary word and put ii in the sentence. 1. Small … are very often service industries. 2. The …industries don't produce material goods. 3. More than 80 per cent of all business ….are not from sole proprietorships. 4. Less than 20 per cent of European business are partnerships or… 5. Sole proprietorships…only a small part of all business receipts. 6. Is this bank owned publicly or… 7. There are three...of business ownership. A. receipts B business C service D privately E account F corporation G forms
Dialogue Jim Hi, Alice. How are you getting on? Alice Fine, as usual, thanks, Jim. What about you? Jim I'm O.K. It's nice to see you. Alice You too. I'm glad you are not in a hurry and we have time to talk today. Jim Sure. Alice Can you give me a piece of advice? Jim Well, I'll try if I can. Alice You know I've been always good at cooking. It interests me. I am thinking of starting ray own business-cafe. Jim It might be a good idea. Alice I guess I must learn about the responsibilities of going into business. Jim Are you going into this business by yourself? Alice Exactly. I'd like to have a cafe with my name on it where I make the decisions and where I control the profits. Jim You seem to be resolute so I'll try to help you. If you go into business alone, it is called sole proprietorship. In such case you needn't consult a lawyer to form the business. You can start or you can stop your business whenever you like. Alice It sounds encouraging. What else can you tell me? Jim There is no need to consult partners or a board of directors. So you can put your policies into effect quickly. You decide on your vocation, hours, salary, hiring and firing. Alice Well, that's not bad. Jim Wait a moment. I believe I have to tell you about the risk involved. Alice What do you mean? Jim First of all, the most important risk is that you have unlimited liability. It means that you are responsible for all your business debts. Alice So if the business fails, I have to declare personal bankruptcy, don't I? Jim That's what I mean. You can lose your personal assets. Alice Well, it's rather disappointing. What other things should I know? Jim You won't get tax benefits which partnerships or corporations can get. Alice I know about it. By the way do you know of a good accountant to do my taxes? Jim Of course. You'll also have to hire a good bookkeeper if you can't do your books yourself. Alice I can't say anything definite about that. I have to think it over. What else, Jim? Jim Well, I am a bit hungry, why don't we have a snack together and discuss the things in the cafe. Alice You are right as usual. Let's go. Exercises Unit 8 Text. PARTNERSHIPS A partnership is an association of two or more persons to carry on a business for profit. When the owners of the partnership have unlimited liability they are called general partners. If partners have limited liability they are " limited partners". There may be a silent partner as well - a person who is known to the public as a member of the firm but without authority in management. The reverse of the silent partner is the secret partner - a person who takes part in management but who is not known to the public. Any business may have the form of the partnership, for example, in such professional fields as medicine, law, accounting, insurance and stockbrokerage. Limited partnerships are a common form of ownership in real estate, oil prospecting, quarrying industries, etc. Partnerships have more advantages than sole proprietorships if one needs a big capital or diversified management. Like sole proprietorship they are easy to form and often get tax benefits from the government. Partnerships have certain disadvantages too. One is unlimited liability. It means that each partner is responsible for all debts and is legally responsible for the whole business. Another disadvantage is that partners may disagree with each other. Exercises
I. Answer the questions. 1. What is the difference between a general partnership and | limited partnership? 2. Is there any difference between a silent partner and a el partner? What is this difference? 3. In what professional fields are the partnerships found? 4. In what businesses is the partnership a common form? 5. What are the advantages of a partnership? ft. Discuss the disadvantages of a partnership. Would you ii partnership or sole proprietorship for business? Give your reasons.
Dialogue (Two friends Susan and Maurice; are having supper in a Restaurant) Maurice Haven't seen you for a long time. What have you been busy with? Susan I've been pretty busy. Do you know my friend Nora? I went into business with her. Maurice Really? How is it going on? Susan Fine, thanks. We get along very well, and the shop is attracting more and more customers. Maurice It sounds well. How many partners are there in your business? Susan There arc two of us and I am very pleased about it. I've made a right choice. Nora's background is in accounting. She is very good at keeping the books. Maurice And you? Susan You know I always liked talking. I guess I am rather good with customers. 1 enjoy selling things. Maurice Well, it sounds interesting. 1 believe you don't run a risk in your business. Susan We haven't had many problems, although 1 suppose all business can be risky. As partners we are both liable. Maurice Did you both put the same amount of money into your business? Do you mind my asking? Susan No. we didn't invest the same amount of capital. But I think we've combined our resources very well. I think if s good for both of us. Maurice It seems really so. That is one advantage of general partnership. You can invest less capital than your partner - even no money at all. But you as a partner can contribute important services or skills, sometimes just a name or a reputation. Susan Indeed. Maurice How did you arrange to distribute profits and losses? Susan We share them equally. We hope to be in business for a long time. Maurice Nice for you. Now you seem lo know a lot about business. Susan Not everything yet but the subject becomes quite technical. Maurice I am glad to hear it. It's time lo go now. See you later. Bye. Exercises. I. Transform the sentences according to the model. Model: Susan is a woman. She does the books. Susan is a woman who does the books. 1. Partners are people. They have unlimited liability. 2. This is my partner. He often runs a risk, 3. He is a shop-assistant. He gets along well with all the customers. 4. Susan is a partner. She puts a big amount of money into business. 5. Jean is my friend. She has the background of accounting, 6. Barbara is my partner. She knows how to attract customers. 7. Tom is a partner. He is good at selling. 8. Jack is my friend. He is a secret partner of my business. 9. Helen is my friend. She had supper with Jack in the restaurant. II. Answer the questions. 1. What do you want to be busy with? 2. Do you want to go into business alone or with a partner? 3. With what partner do you get along well? 4.Imagine you run a shop. What will you do to attract customers? I 5. Do you need to consult a lawyer, to make a right choice when starting the business. 6. What is your background? 7. Are you a careful person, or do you like to run a risk? 8. How can you combine the resources with your partner? 9. What services and skills can you contribute in your business? 10.How will you distribute profits and losses in your partnership? 11.What kind of partner would you like lo be: a general partner or a limited partner? Why so?
III. Make the sentences negative. Model: I am going into business. I am not going into business. 1. Your business is receiving the tax benefits. 2. Your partnership is running the great risk. 3. We are getting along quite well with my partner. 4. They are going to be general partners. 5. The partners are sharing profits and losses with each other. 6. Their partnership is losing their profit every month.
IY. Put up four questions of different types (general, special, disjunctive, alternative) to each sentence. Model: The partners are getting along quite well. 1. Are the partners gelling along quite well? 2. Why are the partners gelling along quite well? 3. The partners are getting along well, aren't they? 4. Are the partners getting along well or badly? 1. Jane is doing the books in our firm. 2. We are putting the same amount of money into business. 3. My brother is investing his money in the private cafe. 4. They are distributing the losses unequally. 5. We are combining resources very well. YI Make up the dialogue. Consult the lawyer how to form a partnership. Use your active vocabulary. Unit 9
Text. CORPORATIONS
A business corporation is an institution established for the purpose of making profit. It is operated by individuals. Their shares of ownership are represented by stock certificates. A person who owns a stock certificate is called a stock-holder. There are several advantages of the corporate form of ownership. The first is the ability to attract financial resources. The next advantage is the corporation attracts a large amount of capital it can invest it in plants, equipment and research. And the third advantage is that a corporation can offer higher salaries and thus attract talented managers and specialists. The privately owned business corporation is one type of corporation. There are some other types too. Educational, religious, charitable institutions can also incorporate. Usually such corporation does not issue stock and is nonprofit. If there is a profit it is reinvested in the institution rather than distributed to private stockholders. In some western countries, cities, states, federal government and special agencies can establish governmental corporations. A few examples of these governmental corporations are state universities, state hospitals and city owned utilities. Governmental corporations are non-profit as a rule and usually they do not issue stock certificates. Exercises I. Answer the questions. 1. Who can own a corporation? 2. Is a corporation necessarily larger than a sole proprietorship? 3. What are the advantages of the corporate form of ownership? 4. What can you say about the disadvantages of the corporate form of ownership? 5. Do the corporations issue stock to stockholder? 6. What kind of corporations usually don't issue the stock? 7. What world-known corporations do you know? 8. What types of business usually take the corporate form of ownership?
II. Choose the necessary word and put it in the sentence. 1. What kind of... is better buying stock or buying real estate? 2. To attract greater financial... the company issues the stock. 3. A university can be... corporation. 4. The partners didn't put the same... into business. 5. The group of people from different countries are going to... a corporation. 6. The Red Cross is an international... organization. 7. I want to buy some... in IBM and General Motors. 8. An educational... usually reinvests all its money.
A charitable B stock C resources D institution E investment F nonprofit G amount H of capital I to establish
Dialogue Secretary Good afternoon. Steve Good afternoon. I'd like to see Mr. Jackson. We have an arrangement with him. My name is Mr. Watson. Secretary Just a minute, please. I'll let him know you are here. Secretary Thanks. Secretary Mr Jackson is waiting for you. Do you know where his office is? Steve Oh sure, thank you. Jackson Hello, Steve, it's so nice to see you. Sit down, Please. Steve Thanks, Nick. How arc you getting on? Jackson Quite all right, thanks. And what about you? Steve Everything is all right too. In fact I want to talk to you about my business. Jackson Oh, I'll be glad to do something for you. Steve Well, Nick. I need some legal advice. John and I are thinking of incorporating. Jackson You are going to expand, aren't you? It seems that your partnership has been doing very well. Steve Oh, yes. We have a success. Now some businessmen are interested in investing with us. So could you explain me what sort of legal procedure I have to follow to form a corporation? Jackson At first you have to apply for a corporate charter. Steve Well? Jackson Let me get this straight. You want to issue and sell stock in exchange for investment capital, don't you? Steve Exactly. Jackson After you obtain the charter the stockholders, as owners, hold a meeting to organize the corporation. Steve Does that mean we elect our Board of Directors, adopt bylaws and choose the company's officers? Jackson Thai's what I mean. Though (he officers of ihe company supervise daily management, the stockholders always have final authority. They vole at annual meetings. Steve Yes, I see it. By the way, does a corporation have limited liability? Jackson It does. Il also has the right to own property, to buy and sell and right to sue and be sued. Steve I sec. The corporation acts like a person. It has the right of an individual. Jackson You are right. Steve O.K. Why don't we get together for a game of golf one day next week?
Exercises I. Transform the sentences according to the model. Model: We are the company officers. We supervise daily management. We, as the company officers, supervise daily management. 1. My friends are the stockholders of IBM corporation. They hold annual meetings. 2. These businessmen are the organizers of this corporation. To issue and sell stock in exchange for investment capital. 3. A corporation is the owner of the property. It has limited liability. 4. Dick is a manager. He wants to form a corporation. 5. A corporate charter is a certificate of incorporation. A charter is granted by a state officer. 6. The stockholders are the owner of the corporation. They have final authority in management of the company. 7. The owners of the corporation are the stockholders. The owners of the corporation must vote. II. Transform the sentences according to the model. Model: We organized our corporation a year ago (to invest much money). We have been investing much money since we organized our company. 1. They became company officers (to supervise daily management). 2. My friend bought the stock of the company five years ago (to make money). 3. They received the corporate charter a month ago (to plan a meeting). 4. We advertised the application last week (wait for reply). 5. He became a member of the Board of Directors (work hard). 6. We elected a new Board of Directors last month (plan change). III. Answer the questions. 1. In what corporation would you invest money? 2. What legal procedure do you have to follow if you want to form a corporation? 3. Who has final authority and supervises the daily management of a corporation? 4. How often do the stockholders choose the company officers? 5. The stockholders have unlimited liability, don't they? 6. In what way can a corporation act? 7. What do you think about the possibilities of forming corporations in this country? 8. In what spheres of industry is a corporate form of proprietorship the most beneficial in this country? IY. Make the sentences negative. Model: They have held a meeting. They haven't held a meeting. 1. The stockholders have elected the Board of Directors. 2. This corporation has issued the stock. 3. The Board of Directors has chosen the company officers. 4. This company has greatly expanded. 5. We have already applied for a corporate charter. Y . Put up 4 questions of 4 types (general, special, disjunctive, alternative) to each sentence. Model: The stockholders have held the annual meeting. 1. Have the stockholders held the annual meeting? 2. What have the stockholders done? 3. The stockholders have held the annual meeting, haven't they? 4. Have the stockholders held a meeting or a conference? 1. The partners have applied for a corporate charter, 2. The stockholders have voted at the annual meeting. 3. The company has issued the additional stock. 4. They have invested all their money in this company. YI. Make up the dialogue. 1. Ask a lawyer how to form a corporation. 2. Discuss with your friend advantages and disadvantages of a corporate form of proprietorship. 3. Advertise a corporate form of proprietorship. Unit 10 THE FUNCTIONS OF AN EXECUTIVE
Exercises 1. Answers the questions. 1. Which options should an employer first consider when he wants lo hire a new employee? 2. What service does a personnel department provide? 3. In what way can be the new employees be found outside one's company? 4. What qualifications does the employes consider in choosing an employee? 5. What is meant by " professional qualification" for a job? 6. What personal characteristics does the administrator consider when choosing an employee? Dialogue Anna is having lunch with her sister Barbara. Anna has just accepted a position as an Administrative Assistant. Her boss is an executive with a firm that manufactures heavy machinery used in construction. Barbara You've got a new job, Anna. My congratulations. Anna Thanks, Barbara. Barbara Tell me a few words about your boss. What does he do? Anna Well, he is one of the vice presidents of the company so he's rather important. He is an executive. Barbara Do you know the difference between an executives manager and an administrator? Anna I am afraid I can hardly tell you the difference. I think these words are interchangeable and they really aren't different in many companies. Barbara What about your company? Anna In our company the top officers are called administrators. The next highest group - the vice presidents, the heads of major departments and branch plant managers - are executives like my boss. Barbara Is that all? Anna The group below consists of managers, they are general managers and foremen. Barbara So I see that an organization has a number of positions and some people have more authority than others. Anna You are right. Barbara But it would be interesting to know more about the functions of an executive like your boss. Anna I'd say he makes a lot of important decisions. He sets objectives, coordinates work, delegates authority, makes hiring, firing, evaluating and just general leading. Barbara It seems to be important. Anna It is important. It's evident that making careful decisions is the basis of good management. Barbara But do, you work under much pressure? Anna Barbara, you know I am quite used to working under pressure from my last job. I am also accustomed to lots of paper work and red tape. Barbara Good for you. Anna And what's more important I feel that I can learn a lot because my boss is very competent. Barbara Good, I think we'd be in a hurry not to get late for the work. Exercises I. Transform the sentences according to the model. Model: I'm accustomed to setting objectives. I'm used to setting objectives. 1. We are accustomed to having unlimited liability. 2. He is accustomed to delegating authority. 3. They are accustomed to firing and hiring people. 4. She is accustomed to working as a head of the department. 5. You are accustomed to working under pressure. 6. The executive is accustomed to making decisions. II. Change the modal verb according lo the model. Model: We ought to set objectives this month. We should set objectives this month. 1. They ought to talk about the functions of an executive. 2. A manager ought to make careful decisions. 3. An executive ought to be very competent. 4. A vice president ought to decide on hiring, firing, vacation, hours. 5. The board of directors ought lo plan objectives and changes. 6. They ought lo have a meeting with a head of the department. III. Answer the questions. 1. What working position is the best for you? 2. Are you accustomed lo working under pressure? 3. Are you accustomed to a red-tape job? 4. Do you what to be an executive or an administrator of the big company? What should you do for it? 5. What qualities do you need to be an executive of the company? 6. What does it mean to be a competent manager? Unit 11 Exercises
I. Answers questions. 1. What does the organization structure mean? 2. What docs the organization structure provide? 3. What is historically the oldest type of organization structure? 4. In what position is a sales manager in attitude to a vice-president of marketing and a salesman? 5. What is the difference between line and staff departments? 6. Why is an advertising department or a credit department considered staff structure rather than line structure? II. Choose the necessary word and put it in the sentence. 1. Organization structure shows... between each position and positions above and below. 2. A sales manager has direct... over a salesman. 3. As a rule a... usually does not give. orders to other departments. 4. When the business gets more.., there is a need for staff departments. 5. My friend......of sales manager. 6. The... of staff departments is to do different services. 7. My friend works in a......, he is responsible for the company product.
A relationships B to hold a position C authority D complex E task F a line department G a staff H department
Text II. Unemployment There will always be a certain amount of unemployment in the economy. When economists talk about full employment they mean that everyone who can work and wants to work has got a job. Able workers who are not working are simply not happy with the salaries that are offered - or just can't be bothered! However, economies rarely reach full employment. There are a number of reasons for this, and a number of different types of unemployment. One of these is cyclical unemployment. This type of unemployment varies with the growth and recession cycle of the economy. As the economy grows, demand for labour grows and unemployment falls. As the economy contracts, unemployment grows. A second kind of unemployment is structural unemployment. This occurs when changing public-tastes or advances in technology cause a fall in demand for some types of work. For example, computer technology has revolutionised the printing industry, and many traditional printers' jobs have become obsolete. Sometimes whole regions of a country suffer from high structural unemployment. The north-east of England, for example, was famous for many years for its shipbuilding industry. Competition from abroad forced many shipyards to close. This caused huge unemployment in the region. How long structural unemployment lasts will depend on two things. Firstly, how easily the workforce can retrain for new jobs. This may be difficult for older workers who find it hard to learn new skills. There is also the question of who pays for the training. The second issue is mobility. Workers who are able to relocate easily to another part of the country will find new jobs more quickly. There are two other kinds of unemployment which we should mention here. These are less serious, perhaps, but they are still difficult for governments to get rid of. The first is frictional unemployment. This is a natural kind of unemployment that occurs when someone leaves a job and is looking for another one that suits them. Frictional unemployment often happens because people want to leave their job in order to change careers. Few people walk straight into another job. However, when the economy is in recession, frictional unemployment will be more common because jobs are harder to find. The second kind is seasonal unemployment. Some industries have busy periods and periods where there is no work at all. Some freelance farm workers, for example, get most of their work in the spring and summer. Like structural unemployment, seasonal unemployment can affect whole regions of a country. Areas that rely on summer tourism, for example, suffer serious unemployment during the autumn and winter months. Exercises I. Complete each sentence with a word or phrase. ■ can't be bothered ■ mobility ■ tastes ■ contracts ■ freelance ■ obsolete region ■ relocates ■ retrain shipyard 1 People's......................in clothes change with fashion and with their age. 2 If you......................to do something, you just don't feel like doing it. 3 When something......................, it gets smaller. 4 A......................is an area of a country. 5 When a company......................to another part of the country or abroad, many workers lose their jobs. 6......................workers are not employees for a company, but are self-employed. 7 If something is.......................it no longer exists because it isn't needed anymore. 8 If you lose your job due to mechanisation, you may have to go to college and......................for something else. 9 A......................is where ships are built, 10 Your......................is your ability to move from one place to another. Informal letter Use this plan to help you. Greeting PARAGRAPH 1 Thank your friend for his/her last letter. Respond to a piece of news he/she had in his/ her letter. Tell your friend your bad news. PARAGRAPH 2 Explain how you lost your job. Explain what the government's reasons were for closing the yard (inflation made exports uncompetitive). PARAGRAPH 3 Explain how you feel about losing your job. How is it affecting you and your family? PARAGRAPH 4 Explain what you're planning to do (retrain / relocate? ).
IY Work in groups of three or four. Imagine you and your friends are running the country.Things are not going well! Here are some of your problems. -» unemployment is high (12%) -» the rate of inflation is also high -» workers are going on strike for higher wages your large steel industry is losing money because of foreign competition Talk to each other and decide which of these problems is the most important. Then decide what you can do to make things better. In your discussion think about: -» retraining / relocation of workers -» cost-push inflation -» the money supply Dialogue Exercises I. Give affirmative and negative answers to the questions. Model: Have you examined the organizational structure of the company yet? Yes, I have already examined it. No, I haven't examined it yet. 1. Have you reported to the comptroller yet? 2. Have you settled this problem with the manager yet? 3. Have you learned line and staff positions of the company yet? 4. Have you got acquainted with your immediate superior yet? 5. Have you heard about his span of control yet? 6. Have you met your immediate subordinates yet? 7. Have you passed your report to the credit department yet? II. Change the sentences according to the model. Model: A staff employee doesn't give orders. A staff employee doesn't receive orders. A staff employee neither gives, nor receives orders. 1. He isn't a Comptroller. He isn't a sales manager. 2. The head of the credit department doesn't advise the President. The head of the credit department doesn't report to comptroller. 3. He doesn't want to hold a position of vice-president of marketing. He doesn't want to hold a position of general manager. 4. A credit department doesn't have direct authority over a line department. A personnel department doesn't have direct authority over a line department. 5.1 don't want to talk with the Boss. I don't want to talk with the Controller. 6. She doesn't like to give orders. She doesn't like to receive orders. 7. Jecky doesn't want to attend annual meeting of shareholders. Susan doesn't want to attend annual meeting of shareholders too. III. Answer the questions. 1. What is your relationship with your immediate superior? 2. What position in your company do you want to hold? 3. Do you want to be a sales-manager or a vice president of marketing? Give your reasons. 4. Over what positions do you have direct authority in your company? 5. What do you like more: to give orders or to receive orders? 6. Do you want to work in a staff department or in a line department? Give your reasons. IY. Transfer the sentences from Active into Passive. Model: The manager examines organizational structure of the firm. Organizational structure of the firm is examined by the manager. 1. Vice-president gives orders to his employees. 2.1 receive orders from the sales-manager. 3. My friend holds a position of general manager. 4. Personnel office receives resumes from prospective candidates. 5. Staff departments do different services to line departments. 6. He takes the orders and fulfils the task very quickly usually. Model: My friend is examining the organizational chart. The organizational chart is being examined by my friend. 1.1 am sending my annual report to my immediate superior. 2. The foreman is firing his immediate subordinate. 3. Comptroller is giving the orders to his employees. 4. We are changing the organizational structure of our company. 5. The board of directors is enlarging the staff of the company. Model: I have invested my money in real estate. My money has been invested in real estate. 1. We have considered advantages and disadvantages of partnership. 2.1 have bought the shares of IBM company. 3. This business has involved big financial resources. 4. We have elected the board of directors. 5. The board of directors have chosen the company officers. Unit 1 Text 1. History of economic thought Economic thought goes back thousands of years. The ancient Greek, Xenophon, used the word oikonomikos (from oikos, meaning/amily, household, estate, and nomos, for usage, law). He was talking about skilful or clever ways to man; land and households. We could call many of Aristotle's political writings economics, although he did not use the word. The English word economics first appeared in the 19th century -two and a half thousand years after Xenophon. Early economic thought was all about the meaning of wealth or being rich. These early thinkers asked, 'what makes a state or a country wealthy? ' For nearly 2, 000 years, the answer was very simple: gold. A country or nation' wealth depended on its owning precious metals. This simple view of the economy remained um medieval times. During medieval times - roughly the period between 1100 and 1500 AD, trading between nations grew, and a new social class appeared, were merchants, people who made their money through the buying and selling of goods, and they began to write their own thought on the economy. The saw the economy as a way to make the state strong. For them, the nation's wealth depended on stocks of gold and the size of the population. More people meant bigger armies and a stronger state. These were still simple ideas. However, daily experience had also taught people many basic economic concepts. For example, they understood the importance of trade with other states. They realised that scarcity makes things more expensive and abundance makes them cheaper. Modern economics was really born in the 19th century. At this time, thinkers like Adam Smith wrote down ideas that are still important today. Adam Smith is often called the Father of Modern Economics, although the science was called political economy then. Smith realised that a nation's wealth depended on its ability to produce goods. The value of these goods depended on the cost of production. The cost of production depended on the cost of workers, raw materials and land. This was really the first example of macroeconomics. Smith and other classical economists were writing at a time of great change. The industrial revolution had begun. Paper money began to replace precious metals. The middle classes were growing stronger. Economists' theories echoed these changes. They wrote about the division of labour (each worker taking their part in the production process). They discussed the problems v population growth. They influenced thinking about social classes. For classical economists, the value of goods depends on the cost of production. However, the price of goods is not always the same as their real cost. Later economists developed new theories to explain this weakness in classical economics. These are known as the neoclassical economists and they were writing at the end of the 19th and Iv 20th centuries. In neoclassical economics, supply and demand the economy work. In other words, the of goods depends on how much people want them and how easily they can be found. Consumers want satisfaction from their (time and money). Firms want profit. In neoclassical economies, this is the basic in the economy. These ideas are still the basis of economic thinking today. Exercises |
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