Английский для экономистов и менеджеров. Ульянова О.В - 33 стр.

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ty is self-interest. Each unit in the economy attempts to do what is best for it-
self. Firms will act in ways which, they believe, will lead to maximum profits (or
minimum losses). Owners of land and capital will employ these assets so as to
obtain the highest possible rewards. Workers will tend to move to those occupa-
tions and locations which offer the highest wages. Consumers will spend their
incomes on those things which yield the maximum satisfaction.
D Continue the list.
Self-interest can be realized in the form of
• maximum profits
•
•
•
E Competition
Economic competition is another essential feature of a free enterprise
economy. Competition, as economists see it, is essentially price competi-
tion. The model of the market economy envisages a situation where, in the
market for each commodity, there are large number of buyers and sellers. In the-
ory at least, competition is the regulatory mechanism of capitalism. On the one
hand, it protects the customers – they have the right of choice and they benefit
from the fact that competition keeps prices close to costs; on the other hand, it
makes producers and suppliers of scarce resources utilize them economically,
using most sophisticated technologies.
E Which is true?
• Competition makes prices lower.
• Competition makes prices higher.
• The influence of competition is difficult to predict.
F Markets and Prices
Perhaps the most basic feature of the market economy is the use of the
price mechanism for allocating resources to various uses. The price system
is an elaborate system of communications in which innumerable free choices
are aggregated and balanced against each other. The decisions of producers de-
termine the supply of a commodity; the decisions of buyers determine the price.
Changes in demand and supply cause changes in market prices and it is these
movements in market prices, which bring about the changes in the ways in
which society uses its economic resources.
F Who determines the price in the market?

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