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entity with a single consciousmind. This is not, of course, the case. To understand reportsof market behaviour you have to bear in mind the way themarket works.

A market is simply a mechanism, which allows individualsor organizations to trade with each other. Markets bringtogether buyers and sellers of goods and services. In somecases, such as a local fruit stall, buyers and sellers meetphysically. In other cases, such as the stock market,business can be transacted over the telephone, almost byremote control. There's no need to go into these details.Instead, we use a general definition of markets.

A market is a shorthand expression for the process by whichhouseholds' decisions about consumption of al-ternativegoods, firms' decisions about what and how to produce, andworkers' decisions about how much and for whom to workare all reconciled by adjustment of prices.

Prices of goods and of resources, such as labour,machinery and land, adjust to ensure that scarce resourcesare used to produce those goods and services that societydemands.

Much of economics is devoted to the study of how marketsand prices enable society to solve the problems of what,how and for whom to produce. Suppose you buy ahamburger for your lunch. What does this have to do withmarkets and prices? You chose the cafe because it wasfast, convenient and cheap. Given your desire to eat, andyour limited resources, the low hamburger price told you thatthis was a good way to satisfy your appetite. You proba-blyprefer steak but that is more expensive. The price of steak ishigh enough to ensure that society answers the "for whom"question about lunchtime steaks in favour of someone else.

Now think about the seller's viewpoint. The cafe owner is inbusiness because, given the price of hamburger meat, therent and the wages that must be paid, it is still possible tosell hamburgers at a profit. If rents were higher, it might bemore profitable to sell hamburgers in a cheaper area or toswitch to luxury lunches for rich executives on expenseaccounts.. The student behind the counters working therebecause it is a suitable part-time job, which pays a bit ofmoney. If the wage were much lower it would hardly beworth, working at all. Conversely, the job is unskilled andthere are plenty of students looking for such work, soowners of cafes do not have to offer very high wages.

Prices are guiding your decision to buy a hamburger, theowner's decision to sell hamburgers, and the student'sdecision to take the job. Society is allocating resources –meat, buildings, and labour – into hamburger productionthrough the price system. If nobody liked hamburgers, theowner could not sell enough at a price that covered the costof running the cafe and society would devote no resources tohamburger production. People's desire to eat hamburgersguides resources into hamburger production. However, ifcattle contracted a disease, thereby reducing the economy'sability to produce meat products, competition to purchasemore scarce supplies of beef would bid up the price of beef,hamburger producers would be forced to raise prices, andconsumers would buy more cheese sandwiches for lunch.Adjustments in prices would encourage society to reallocateresources to reflect the increased scarcity of cattle.

There were several markets involved in your purchase of ahamburger. You and the cafe owner were part of the marketfor lunches. The student behind the counter was part of thelocal labour market. The cafe owner was part of the localwholesale meat market and the local market for rentedbuildings. These descriptions of markets are not veryprecise. Were you part of the market for lunches, the marketfor prepared, food or the market for sandwiches to which youwould have turned if hamburgers had been moreexpensive? That is why -we have adopted a very generaldefinition of markets, which emphasizes that they arearrangements through, which prices influence the allocationof scarce resources.

Fill in the gaps with the words and expressions from the text

1 To understand reports of market behaviour you have to …the way the market works

2. ...On the stock market, business can be transacted over the telephone, almost by … . 3. ...A market is a … expression for the process by which households’ decisions about consumption of goods, firms’ decisions about what and how to produce, and workers’ decisions about how much and for whom to work are all … by ….

4. Much of economics is devoted to the study of how markets and prices … society to solve the problems.

5. …. your desire to eat and your limited resources, the low hamburger price told you that this was a good way to … your appetite.

WHAT MAKES ALL PEOPLE KIN
People all over the world are very fond of sports and games. That is one thing in which people of every nationality and class are united.

The most popular outdoor winter sports are shooting, hunt­ing, hockey and, in the countries where the weather is frosty and there is much snow — skating, skiing and tobogganing. Some people greatly enjoy figure-skating and ski-jumping.

Summer affords excellent opportunities for swimming, boating, yachting, cycling, gliding and many other sports. Among outdoor games football takes the first place in public interest; this game is played in all the countries of the world. The other games that have firmly established themselves in favour in different countries are golf, lawn-tennis, cricket, volley-ball, basket-ball, and so on. Badminton is also very popular.

All the year round many people indulge in boxing, wres­tling, athletics, gymnastics and track and field events. Scores of young girls and women go in for callisthenics.

Among indoor games the most popular are billiards, ta­ble tennis, draughts and some others, but the great interna­tional game is chess, of course. The results of chess tournaments are studied and discussed by thousands of enthusiasts in different countries.

SPORTS AND GAMES POPULAR IN ENGLAND

— What would you say are the most
popular games in England today?

— Well, I suppose football, that
is, soccer or rugger, and cricket.

— What are the other outdoor
games?

— Oh, there's tennis, hockey,
golf, and so on. Tennis is played all the year round — on hard courts or grass
courts in summer, and on hard or covered courts in winter.

— What about horse-racing?

— I should say that is one of the
most popular sports in Great Britain. Then there are, of course, walking-races,
run­ning, swimming and boxing.

— I've been told that there are
no winter sports in En­gland.

— Well, you see, the English
winter isn't very severe as a rule, and we don't often have the chance of
skiing, skating or tobogganing, but winter is the great time for hunting,
provid­ed the ground is not too hard.

— Is there any golf to be had
near London?

— Oh, yes, any amount. There are
dozens of good golf-links within an hour or so of London. You ought to join a
golf club if you're keen on the game.

— I think I shall if I get the
chance. What about indoor games?

— Well, there's chess, billiards,
cards, table tennis... By the way, do you play billiards?

— Well, I do, but of course, I'm
not a professional or a champion, just an ordinary amateur, and not a very good
one at that,