XV. Describe the command economy.

XVI. Text C Market Economy

In a market economy, the questions of What, How and Whom to produce are made by individuals and firms acting in their own best interests. In economic term a market is an arrangement that allows buyers and sellers to come together to conduct transactions.

The state plays little or no part in economic activity. Most of the people in the non-communist world earn and spend in societies which are still fundamentally market economies.

The market system of economic organisation is also commonly described as a free enterprise or laissez — fair e, or capitalist system. We shall use all these terms to stand for a market economy. Strictly speaking the pure market of laissez-faire system has never existed. Whenever there has been some form of political organisa­tion, the political authority has exercised some economic functions (e.g. controlling prices or levying taxation). It is useful, however, to consider the way in which a true market system would operate because it provides us with a simplified model, and by making modifications to the model we can approach the more realistic situations step by step.

Since consumers like products with low prices and high quality, producers in market economy will try to supply such products. Those who make the best products for the lowest prices will make profits and stay in business. Other producers will either go out of business or switch to different products consumer can buy.

There are several other essential elements in a market economy. One of these is private property. By «private property» we mean the right of individuals and business firms to own the means of production.

Although markets exist in traditional and command economies, the major means of production (firms, factories, farms, mines, etc.) are usually publicly owned. That is, they are owned by groups of people or by the government. In a market economy the means of production are owned by private individuals.

Private ownership gives people the incentive to use their property to produce things that will sell and earn them the profit.

This desire to earn the profits is a second ingredient in a market economy. Often referred to as the profit motive, it provides the fuel that drives sellers to produce the things that buyers want, and at a price they are willing to pay.

A market economy has several major advantages that traditional and command economies do not have. First, a market economy is flexible and can adjust to change over time.

When gas prices in the United States began to level off in 1985 and then decline in 1986, the trend slowly began to reverse.

The second major advantage of the market economy is the freedom that exists for everyone involved. Producers are free to make whatever they think will sell. They are also free to produce their products in the most efficient manner. Consumers on the other hand are free to spend their money or buy whatever goods and services they wish to have.

The third advantage of the market economy is the lack of significant government intervention. Except for national defence, the government tries to stay out of the way. As long as there is a competition among producers, the market economy generally takes care of itself.

The final advantage of the market economy is the incredible variety of goods and services available to consumers. In fact, almost any product can and will be produced so long as there is a buyer for it.

XVII. Find the equivalents in the text:

Власні інтереси,висока якість, пропонувати продукти, володіти засобами виробництва, заробляти прибуток, низька ціна, платити, гнучка система, національна оборона, переорієнтуватись, не втручатись, неймовірна різноманітність, спрощена модель, збирання податків.

XVIII. Complete the following sentences:

1. In a market economy the questions of What, How and Whom to produce are made by ______________.
2. In economic term a market is ____________.
3. Since consumers like products with low prices and high quality ___________
4. Those who make the best products for the lowest prices will make ______________
5. Other producers will either go out of business or __________________.
6. A market economy has several major advantages that _________________.
7. The first advantage of the market economy is ___________________.
8. The second major advantage of the market economy is _________________.
9. Consumers are free to spend their money or _______________________.
10. The third advantage of the market economy is ______________
11. As long as there is competition among producers, the market economy generally ___________.
12. The final advantage of the market economy is ________________.

XIX. Fill in the gaps with the given words:

profits, firms, private property, earn, advantages, products (2), flexible, to produce, individuals, market, the means of production, business, to conduct.

1. In a market economy, the questions of What, How and Whom to produce are made by _____________ and_________________ acting in their own best interests.

2. In economic term a _________________ is an arrangement that allows buyers and sellers to come together________________ transaction.

3. Since consumers like __________ with low prices and high quality, producers in market economy will try to supply such _________________

4. Those who make the best products for the lowest prices will make ________________
and stay in ____________.

5. By _____________________we mean the right of individuals and business firm to own the means of production.

6. In a market economy ___________ are owned by private individuals.

7. Private ownership gives people the incentive to use their property _____________ things that will sell and_____________ them the profit.

8. A market economy has several major ______________that traditional and command economies do not have.

9.A market economy is ________________ and can adjust to change overtime.

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