Theory of the Consumer

1. The individual consumeror household is assumed to possess a utility functionwhich specifies the satisfaction which is gained from the consumption of alternative bundles of goods. The consumer's income or income-earning power determines which bundles are available to the consumer. The consumer then selects a bundle that gives the highest possible level of utility.

2. With few exceptions, the consumer is treated asa price taker—that is, the consumer is free to choose whatever quantities income allowsbut has no influenceover prevailing market prices. In order to maximizeutility the consumer purchases goods so that the subjective rate of substitution for each pair of goods as indicated by the consumer's utility function equals the objective rate of substitution given by the ratio of their market prices.

Theory of the Producer

3. The individual producer or firm is assumed to possess a production function, which specifies the quantity of-output produced as a function of the quantities of the inputs used in production. The producer's revenueequals the quantity of output produced and sold times its price, and the cost to the producer equals the sum of the quantities of inputs purchased and used times their prices. Profit is the difference between revenue and cost. The producer is assumed to maximize profits subject to the technology given by the production function.

4. Under pure competition,the producer is a price taker who may sell at the going market price whatever has been produced. Under monopoly (one seller) the producer recognizes that price declines as sales are expanded, and under monophony (one buyer) the producer recognizes that the price paid for an input increases as purchases are increased.

5. A producer's cost function gives production cost as a function of output level on the assumption that the producer combines inputs to minimize production cost.

Vocabulary:

V. Ответьте на вопросы письменно.

1. What is individual consumer assume to possess?

2. What does the consumer’s income determine?

3. What does the consumer do in order to maximize utility?

4. What is individual producer assumed to possess?

5. What does the producer’s revenue equal?

ВАРИАНТ 4

I. Перепишите следующие предложения; подчеркните в каждом из них глагол-сказуемое и определите его видо- временную форму и залог. Переведите предложения на русский язык. В разделе (б) обратите внимание на перевод пассивных конструкций.

а) 1.Real exports are growing too.

2.The Scottish economy has hold up relatively well during the recent recession. (to hold up well – выстоять, сохранить свои позиции).

6) 1.Operating expenses are expected to drop slightly this year.

2. Housing reform had not been implemented in full.

II. Перепишите следующие предложения; подчеркните Participle I и Participle II и установите функции каждого из них, т. е, укажите, является ли оно определением, обстоя­тельством или частью глагола-сказуемого. Переведите пре­дложения на русский язык.

1. Now we are offering a similar drink with an improved flavor, packaging and design.

2. In making its choice, the government decision maker should weigh all benefits and costs.

3. As initially formulated, the theory of comparative advantage is based on labor-cost differentials.

4. Her chain of natural cosmetics stores has created over 3,000 jobs in the United Kingdom and many more overseas.

III. Перепишите следующие предложения; подчеркни­те в каждом из них модальный глагол или его эквивалент. Переведите предложения на русский язык.

1. Where the monopoly is detrimental to customers it can be prohibited by legislation.

2. The work must be done immediately.

3. They may export these drinks both to France and Italy.

4. To economize on the electricity they have to reduce the working hours.

IV. Прочитайте и письменно переведите текст.

What is Banking

1. Banking is the transactions carried on by any per­son or firm engaged in providing financial services to consumers or businesses. For these purposes there exist commercial banks, central banks, savings banks, trust companies, finance companies and merchant banks. Banking consists of safeguarding and transfer of funds, lending or fa­cilitating loans, guaranteeing creditworthiness and exchange of money. In other words, banking is the acceptance, transfer, and creation of deposits. The depository institutions are central banks, commercial banks, savings and loan associations, building socie­ties, and mutual savings banks.