advertise     afford      competition

controlled costs incentive    limit

prepared      profit        raise reduce         role

street market          theoretical

1. Every Saturday this road becomes the local … where people come to buy fruit and vegetables.

2. Businesses … their products in the media to attract more customers.

3. My … in the business is to meet customers and find out what they want.

4. Making money is the main … to work.

5. I bought this old camera for ?50 and sold it for ?75. That's ?25 … .

6. If there's only one producer in the market, there's no … .

7. Production … are the amount of money companies spend to make a product.

8. The idea that life exists on other planets is … .Nobody knows for sure.

9. A … economy is one where a government decides what can be bought and sold and/or how it is done.

10. The speed … on this road is 90 kilometers per hour.

11. When there is a demand we … prices but we … them if we want to sell something quickly.

12. I can't … that car - it's far too expensive.

13. People are … to pay a lot for services if they are of a good quality.

Now read the text again and answer these questions in your own words in the space provided below.

1. Who controls a market economy?

2. Who decides what products are for sale in a free market?

3. What do companies want?

4. Why is competition a good thing?

5. Why does technology exist in the market economy?

6. Why are there no true market economies in the world today?

The planned economy

In many ways, the planned economy is the direct opposite of the market economy. In the market economy, the forces of supply and demand decide everything: what is produced, how much is produced, the methods of production and the price. In the planned economy, all of this is decided by the government. In every way that the market economy is free, the planned economy is controlled.

Unfortunately, no economic system is perfect. If there was a perfect system, economists wouldn't have anything to argue about! Market economies have their strengths, but they have their problems, too. Planned economies try to provide solutions to these problems. For example, the free market supplies the things that people want. However, what people want and what they need are not always the same: Fast food is always in demand, but it's bad for us. In a planned economy, the government could decide to stop fast food restaurants operating in the market.

A second problem with free markets is that producers always want the highest price. Often the poor can't afford things. In a planned economy, the government sets prices. They make sure that everyone can afford basic commodities. This is one way that planned economies try to share things equally. Another is to control how much people get paid.

In a planned economy, workers' wages depend on the service they provide to society. If people can live without their service, you get paid less. This is very different from the free market. In the free market, someone's salary mostly depends on the demand for his or her work. If people like what you do, you get paid more.

Before 1900, there were few examples of planned economies. During the 20th century, however, the planned economy became the standard for socialist governments like the USSR and China. These countries experienced amazing economic growth in a very short time. In a market economy, it takes a long time for big industries to grow from small companies. In a planned economy, however, huge industries can grow overnight. The government simply decides to spend money on factories and factories appear. Britain, for example, took centuries to develop her steel industry in a free market economy. China developed hers in a few decades.

But, as we said, no economic system is perfect. The planned economy has many drawbacks. One of these drawbacks is problems with supply. It is difficult for governments of planned economies to know exactly how much to produce to meet demand. In a market economy, when the price of a commodity rises, this indicates a rise in demand. Companies then supply more to the market. This warning system doesn't work in a planned economy because price is controlled by the government. The result is shortages.

When shortages happen, governments can do two things: ration goods or raise prices. In this situation, people then start to hoard things, and the problem gets even worse. As the population gets bigger, shortages like this become more common. For this reason, China - once the world's biggest planned economy - is rapidly moving towards another system: the mixed economy.

Переведите на английский язык:

1. В рыночной экономике спрос и предложение решают всё, а её полной противоположностью является плановая экономика.

2. При плановой экономике правительство решает, что производить, сколько и как производить, по какой цене продавать.

3. В мире нет совершенной экономической системы. Рыночная экономика имеет свои сильные стороны, но у неё есть и недостатки. В странах с плановой экономикой правительства могут создать условия для того, чтобы все могли купить товары первой необходимости.

4.    У стран с плановой экономикой есть проблемы с предложением, поскольку трудно вычислить, сколько нужно произвести и какой будет спрос. Люди вынуждены накапливать и хранить разные товары, повсеместным становится дефицит товаров.

5.    Во многих странах наряду с государственными отраслями существуют частные предприятия, которым для развития нужна защита от рыночной конкуренции.

6.    Уменьшение вмешательства государства в экономику ведёт к росту конкуренции и более свободному действию рыночных сил.

7.    Правительства могут ограничивать свободное предпринимательство, вводя запреты на торговлю различными товарами, предотвращая создание монополий, защищая потребителей и окружающую среду.

The planned economy