II. , :
Supply, transaction, determinants, concern, arise, advanced, value, meaning, markets, conditions, worth, demand.
1) In this chapter we discuss the basic of price.
2) Price is not the same thing as
3) This kind of subjective value is not the of the economist.
4) The economic of value of a good can only be measured in some kind of market
5) Prices in exchange transactions.
6) In the modern world the word market has a much wider
7) Most of the products of technologies also have world
8) The price of any economic good under market is determined by the forces of and
III. :
Transaction, price, especially, developed, cost, advanced, basic, take place, purchaser, particularly, buyer, happen, commodity, kind, good, sort, reveal, discover, main, dealing.
IV. :
Same, false, ignorance, domestic, true, new, different, wide, second hand, foreign, narrow, knowledge.
V. , :
Valuable, necessary, familiar, effective, efficient, complete, normal, important.
VI. :
, , , , , , , , , , , .
VII. 3 :
Think, reveal, represent, buy, sell, imply, find, determine, have.
VIII. , :
1) Thing, is as, value, price, not, same, the.
2) Will, its, different, different, for, be, people, value.
3) Arise, exchange, transactions, prices, in.
4) Word, this, a, has, meaning, wider, much.
5) Commodities, some, for, market, the, normal, traditional, still, is, arrangement, the.
6) Is, for, worldwide, other, market, the, commodities.
IX. :
1) The economic worth value a good can only be measured some kind market transaction.
2) Nowadays practically all exchanges represent and exchange goods and services money are the market value the things they buy.
3) We are all familiar the open and covered markets the centers our towns.
4) Any effective arrangement bringing buyers and sellers contact one another is defined as a market.
5) Face face contact between buyers and sellers is not a requirement a market to be able to operate efficiently.
6) the foreign exchange market, buyers and sellers are separated thousands miles.
X. :
1) This implies some kind of market.
2) The small ad. columns provide a very efficient market for second-hand cars.
3) Buyers and sellers are separated by several miles.
4) Most consumer goods are bought and sold on a countrywide basis.
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5) Most of the products of advanced technologies also have world markets.
XI. , , :
1) Things are valuable because people think they (to be).
2) The economic worth of value of a good can only be (to measure) in some kind of market transaction which (to reveal) the value of the goods in terms of what is (to offer) in exchange for it.
3) If 5 lb of potatoes (to exchange) for 1 lb of sugar, then the price of 1 lb of sugar is 5 lb of potatoes.
4) Nowadays practically all exchange (to represent) an exchange of goods and services for money.
5) Any effective arrangement for bringing buyers and sellers into contact with one another (to define) as a market.
6) The price of any economic good, under market conditions (to determine) by the forces of supply acting through the sellers and the forces of demand acting through the buyers, (to determine) the market price.
XII. :
1) What is the difference between price and value?
2) Where do prices arise?
3) What kind of goods is usually sold in fixed locations?
4) What kind of goods are primarily sold and bought on a countrywide basis?
5) For what products is the market worldwide?
6) What is the price of economic goods determined by in the capitalist world?
Money
1. :
Society, civilisation, adequately, frustrating, surplus, cumbersome, coincidence, merely, disposal, similar, triangular, major, acceptable, medium, amazing, valuation, immediately, wealth, deteriorate, purchase, spread, pattern, installment.
2. :
An essential tool of civilisation, the direct exchange of goods and services, the great disadvantage of barter, a laborious system of exchange, an amazing variety of goods and services, a piece of furniture, the value of one commodity, a means of making deferred payments, in the case of hire purchase contacts.
3. :
Acceptable -
Adequately -
Arrangement -
Article -,
Coincidence -
Consider -
Cumbersome -,
Deferred payment -
Delivery -
Deteriorate -
Devote -
Exchange rate -
Face - -.
Frustrating -
Hire purchase -
Hold -
Invention -
Installment -
Insure -,
Laborious -
Medium -,
Merely -,
Need -,
Payment -
Promise -
Rely upon -
Remove -
Seek out -
Similar -,
Spread -,
Stock -
Store -,
Surplus -
Trading -
Whereby - -.
4. :
Greatest, invention, indicate, extent, cumbersome, coincidence, merely, laborious, triangular, furniture, adoption, valuation, equal, immediately, convenience, addition.
5. :
Invent, indicate, exchange, serve, require, direct, specialise, increase, vary, satisfy, want, produce, arrange, adopt, measure, solve, act, store, consider, accumulate, distribute, add, explain.
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Text. Money
Money is one of mans greatest inventions and the fact that all but the least developed of human societies use money indicates that it is an essential tool of civilization. In the absence of some form of money, exchange may take the form of barter, which is the direct exchange of goods and services. Barter will serve mans requirements quite adequately when he provides most of his needs directly and relies upon market exchanges for very few of the things he wants. As the extent of specialisation increases, the barter system proves very inefficient and frustrating. In the simplest societies each family will provide by its own efforts most of its needs and perhaps some small surpluses. A farmer will exchange any small surplus of food, wool or hides for the surpluses of other producers. But this system of exchange becomes very cumbersome as economic activities become more specialised. A specialist metal worker must seek out a large number of other specialists in order to obtain, by barter, the variety of goods he needs to satisfy his daily wants.
The great disadvantage of barter is the fact that it depends upon a double coincidence of wants. A hunter who wants to exchange his skins for corn must find, not merely a person who wants skins, but someone who wants skin and has a surplus of corn for disposal. The alternative is to exchange his skins for some other article and they carry out a series of similar exchanges until he finally gets his corn. Time and energy, which could be devoted to production, is spent on a laborious system of exchange.
Quite early in his history man discovered a much more convenient arrangement. The use of some commodity as a medium of exchange makes exchange triangular and removes the major difficulty of the barter system. If a commodity is generally acceptable in exchange for goods and services, it is money. A producer now exchanges his goods for money and the money can be exchanged for whatever goods and services he requires.
The Function of Money
1) A medium of exchange.
As we have already explained, the use of money as a medium of exchange makes possible a great extenuation of the principle of specialisation. In an advanced society the use of money allows us to exchange hours of labour for an amazing variety of goods and services. We can exchange, for example, two weeks labour for a holiday abroad just as easily as we can exchange it for a piece of furniture or a years rent on a television set. Such exchanges are taken for granted yet they would be inconvenient without the use of money.
2) A measure of value.
The first step in the use of money was probably the adoption of some commodity as a unit of account or measure of value. Money, most likely, came into use within the barter system as means whereby the values of different goods could be compared. The direct exchange of goods for goods would raise all sorts of problems regarding valuation. For example how many bushels of corn are equal in value to one sheep, if twenty sheep exchange for three cows and one cow exchanges for ten bushels of corn? The problem of exchange rates is easily solved when all other commodities are valued in terms of a single commodity which then acts as a standard of value. Money now serves as such a standard and when all economic goods are given money values (i.e. prices), we know, immediately, the value of one commodity in terms of any other commodity.
3) A store of value.
Once a commodity becomes universally acceptable in exchange for goods and services, it is possible to store wealth by holding a stock of this commodity. It is a great convenience to hold wealth in the form of money. Consider the problems of holding wealth in the form of some other commodity, say wheat. It may deteriorate. It is costly to store, may be insured, and there will be significant handling costs in accumulating and distributing it. In addition, its money value may fall when it is being stored. The great disadvantage of holding wealth in the form of money has become very apparent in recent years during periods of inflation its exchange value falls.
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4) A means of making deferred payments.
An important function of money in the modern world, where so much business is conducted on the basis of credit, is to serve as a means of deferred payment. When goods are supplied on credit, the buyer has immediate use of them but does not have to make an immediate payment. The goods can be paid for three, or perhaps six, months after delivery. In the case of hire purchase contracts, the buyer takes immediate delivery but pays by means of installments spread over one, two or three years.
A complex trading organisation based upon a system of credit can only operate in a monetary economy. Sellers would be most unlikely to accept promises to pay in the future which were expressed in terms of commodities other than money. They would have no idea how much of the commodities they would need in the future, and if they do not want them, they face the trouble and risks involved in selling them. Sellers will accept promises to pay expressed in terms of money because, whatever the pattern of their future wants, they can be satisfied by using money.
