The Participle

Lesson 1.

Economic Activities

Unit II.

What? How? Who?” Demand. Supply.

Task I. Translate the following derivatives:

1) society – social – socialize

serve – service

economy – economics - economist – economic – economical – economize

enterprise – entrepreneur – entrepreneurship

produce – producer – production –productive

consume – consumer – consumption – consumerism

2) supply - to supply increase – to increase

demand – to demand decrease – to decrease

*Task II. Learn the new vocabulary:

Provide – забезпечити

Rely on (upon) – покладатися

Rationing effect –ефект регулювання

Encourage – заохочувати

Output – продукція

To attract – привабити

Task III. Read and translate the following word-combinations:

to provide answers, goods and services, different economies, fundamental questions, to rely on (upon) government, free enterprise system, market price, demand and supply, rationing effect of prices, to attract producers, to increase the price, to decrease the level of output, drive out of the market

**Task IV. Read the text.

What? How? Who?

Every society must provide answers to the same three questions: What goods and services will be produced? How will those goods and services be produced? Who will receive them? Different societies and nations have created different economic systems to provide answers to these fundamental questions. Traditional economies look to customs and traditions for their answers. Others, known as command economies, rely upon governments to provide the answers. In free enterprise systems, market prices answer most of the What, How and Who questions.

Because market prices play such an important part in free enterprise systems, those systems are often described as "price-directed market economies." The forces that determine what prices will be are supply and demand.

Prices In a Market Economy

Prices perform two important economic functions: They ration scarce resources, and they motivate production.

As a general rule, the more scarce something is, the higher its price will be, and the fewer people will want to buy it. Economists describe this as the rationing effect of prices. In other words, since there is not enough of everything to go around, in a market system goods and services are allocated, or distributed, based on their price.

Price increases and decreases also send messages to suppliers and potential suppliers of goods and services. As prices rise the increase serves to attract additional producers. Similarly, price decreases drive producers out of the market. In this way prices encourage producers to increase or decrease their level of output. Economists refer to this as the production-motivating function of prices.

*Task V. Give the English equivalents to the following:

давати відповіді на питання, виготовляти товари та послуги, система вільного підприємництва, ринкова ціна, визначати ціни, недостатні ресурси, регулюючий ефект цін, зростання цін, приваблювати споживачів, заохочувати виробників, рівень виробництва

**Task VI. Answer the questions on the text:

1.What are the questions every society must provide questions to?

2.In what way do different societies provide answers to these questions?

3.What systems do market prices play an important part in?

4.What are important functions prices perform?

5.What is the rationing effect of prices?

6.What is production-motivating function of prices?

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