David's boss, Jay Richards, the entrepreneur who had established the small hardware store two years earlier, faced competition every day. Since starting his business, he had been in competition with other buyers and sellers in the marketplace. He competed with other buyers when he purchased the land for his store. He competed with other borrowers when he applied for his bank loan. He competed every week for the best deals on the goods he bought from his wholesalers. Jay knew that he also had to compete for customers with other hardware stores.

One of his major expenses was labor. He had to keep his labor costs down to meet his other expenses and earn a profit. He knew that David would cost him more, but he decided to pay him the higher wage because David had acquired skills that made him more productive. Jay reasoned that David's experience and knowledge would help the business to save money in the long run.

Supply and Demand.

David was also free to sell his labor somewhere else. He could have competed with others for another job. From the newspaper ad he knew at least one other job was available. Maybe there were others. He wasn't sure. He also wasn't sure about the supply of other workers with his skills. He wondered whether he would get the raise and promotion if there were lots of people who could do the job.

David's boss was also free to interview and hire other workers. In their own ways David and Jay were both trying to get what each thought would be best. They were competing.

Profit Motive and Competition.

Competition drives Jay Richards to do what he can to reduce costs and increase sales in order to increase profits. Of course, his competitors will be doing this too. They also want to earn the greatest profits. The profit motive (the efforts to maximize profits) is free enterprise's most important incentive.

II. Exercises on the Text:

3. Text A. Give English equivalents to:

производители пытаются сократить издержки производства; дает возможность производителям продавать свои товары; путем повышения эффективности; конкуренция побуждает производителей; эта фирма получит большую прибыль; искать новые и привлекательные товары и услуги; конкуренция приносит пользу всем нам.

4. Text B. Ask questions for these answers (work in pairs):

David Scott usually works on weekends during the school year in summer.

He was a stock clerk.

It was in May and June because college students entered the local job market.

He was going to become a supervisor of the younger employees at the store.

He learned the computer-assisted inventory and ordering system and other special things.

Another store in town was advertising for someone with his skills.

He had established the small hardware store two years earlier.

He had been in competition with other buyers and sellers.

When he purchased the land for his store.

Yes, he did. He competed with other borrowers.

Yes, he did. He knew that he also had to compete for customers.

Because David had acquired skills that made him more productive.

5. Combine the words into sentences. Translate them into Russian.

could, his labor, David, else, sell, somewhere.

one other job, knew, from the newspaper ad, he, was available, at least.

who, there, many people, were, the same job, do, could.

entrepreneurs, always, and, competing, employees, are.

wanted, to reduce, in order to increase, Jay Richards, costs, and, profits, increase sales.

incentive, the profit motive, most important, is free, enterprise's.

III. Grammar Exercises

I hope your friend will come and see us on Sunday.

I hoped...

This statistician thinks he will get the latest data.

This statistician thought...

My friend is sure his profession is better than mine.

My friend was sure...

I think they televise international economic events.

I thought...

The manager believes that the work was done thoroughly.

The manager believed ... and so he didn't check it himself.

Mother was sure that her son made good progress at the institute.

Mother was sure ... since the holiday.

We are afraid the firm won't earn great profits.

We were afraid...

I am happy they call me up now and then.

I was happy...

7. Translate the following sentences paying attention to the Sequence of Tenses:

I asked Mr. Olegov where he lived.

He said that he lived in Moscow.

He told me that he worked at a large plant and described where the plant was.

I told him that I knew the plant because I had worked there for about two years.

I said that I didn't work there any longer because I was studying at the Institute of Finance and Economics.

Mr. Olegov asked me if I knew the economists working at the plant.

I told him that I knew most of them.

He told me that the plant had greatly increased its production and was producing almost three times more goods than four years ago.

The other day the manager was asked if he would introduce the new machine constructed by one of the workers with the help of the engineers.

He answered that he would do it as soon as the tests were completed.

Indirect Speech.

При обращении прямой речи в косвенную происходит следующая замена наречий места, времени и указательных местоимений.

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