II. Give English equivalents of the following:

MaTM nepeBarn npnpoflHi pecypCM fljKepeno npn6vTKy o6Me}«yBaTH -ropriBnto BecTH Toprienio

OTpuMyBaTM rrpn6yTOK etA onepau,iM cneLiia/ii3du.ifi 3 BMpo6Hnu,TBa aenKwx

TOBapie BMpo6riHTM to Bap 3 MeHWMMH

BMTparaMM iMfiopTyBaTM TOBap i3-3a KopflOHy TpaHcnopTHi 3aco6n

III. Fill in the blanks with appropriate words:

transportation

supply

labor supply

quotas

specialize

opportunity

costs tariff

efficiently gain

advantage administrative

red tape

. Manufacturing can also be performed more ... in some parts of our country than in others.

. Natural resources, an adequate labor .... and ... facilities have promoted the development of certain industries in particular regions of the country.

. Nations will ... because of differences in terms of climate, natural resources, ..., capital, and technology. Differences make it sensible to ... in the production of some products. A nation has a comparative ... in the production of an item when its ... to produce the item of an item are lower than those of other nations. A ... is a duty, or tax, on imports. Restrictions on the numbers of certain specified goods that can enter the country from abroad are called .... Another tactic that has been used to restrict foreign trade can be classified as ... .

J IV. Read and translate the text:

Nations trade with one another for the same reason that individuals and business firms within a country trade: both sides expect to benefit from the transaction. They benefit

because trade enables them to exchange things they don't need (their surplus goods and services) for the things they do need and want. Some areas can produce things that others cannot. Because of its warm climate and the type of soil it has, Florida grows oranges but not wheat. Kansas grows no oranges, but it does grow wheat. The people in Florida and Kansas would like to have wheat and oranges, and so each specializes in one of those crops and trades its surplus with the other.

Manufacturing can also be performed more efficiently in some parts of our country than in others. Natural resources, an adequate labor supply, and transportation facilities have promoted the development of certain industries in particular regions of the country. For example, the computer industry is concentrated in northern California, the steel industry developed in western

Pennsylvania, and large automobile factories were first built in southern Michigan.

Absolute Advantage. Nations will gain because of differences in terms of climate, natural resources, labor supply, capital, and technology. These differences make it sensible for them to specialize in the production of some products and to buy the other things they need from other countries.

Despite the many advantages of trade between nations, most countries, including our own, often restrict that trade in a number of ways. Some of these ways are discussed below.

Tariffs. A tariff is a duty, or tax, on imports. There are two basic types of tariffs. Revenue Tariffs are levied as a way to raise money. Through most of its history (intil 1910), the United States looked to the revenue tariff as its principal source of income. Protective Tariffs are levied to protect a domestic industry from foreign competition. The goal is to make the foreign product more expensive than a similar item produced in the United States. Then people will stop buying the foreign made item and purchase its domestic counterpart.

Quotas. Restrictions on the numbers of certain specified goods that can enter the country from abroad are called quotas. Like protective tariffs, quotas limit the amount of foreign competition a protected industry will have to face. In the 1980's, for example, the government protected the U.S. automobile industry by placing a quota on the number of automobiles that could be imported from Japan.

Other Tactics. There are a number of other devices that directly affect the flow of trade among nations. One of these is the expect subsidy — a payment by a country to its exporters

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that enables them to sell their products abroad at a lower price than they coutd sell them for at home. Selling the same product for a lower price abroad than at home is called dumping.

Still another tactic that has been used to restrict foreign trade can be classified as ((administrative red fapee. This is the deliberate use of governmental rules and regulations to make it difficult to import goods from abroad (pp. 151 — 155).

V V. Answer the following questions:

\

1. Why do countries trade with each other?

2. What is absolute advantage?

3. Why do nations gain when they specialize?

4. How can you explain the term «comparative advantages?

5. What does the law of comparative advantage explain?

6. Why do most countries restrict trade?

7. In what ways do some countries restrict trade?

8. What is tariff?

9. How can quotas restrict trade?