4. Income and spending

People's incomes determine how many of the economy's goods and services they can purchase. Income is the money a person receives in exchange for work or property. There are five basic types of income:

1. Employee compensation is the income earned by working for others. It includes wages and fringe-benefits such as health and accident insurance.

2. Proprietor compensation is the income that self-employed people earn.

3. Corporation profit is the income corporations have left after paying all the expenses.

4. Interests the money received by people and corporations for depositing their money in savings account or lending it to others.

5. Rent is income from allowing others to use one's property temporarily.

The total income is the sum of employee and proprietor compensation, corporation profit, interest and rent.

By the type of work people do workers fall into one of four broad categories: White-collar workers, blue-collar workers, service workers, farm workers.

Income is not same as wealth, because wealth is any resources that can be used to produce income. An individuals possessions, such as a house or car are part of the person‘s wealth, they can be sold to produce income. When individuals receive any income, whether as allowance, paycheque, or gift, most of that income is spent. Spending becomes income for someone else.

5. Recruitment. The letter of application

When a company needs to recruit or employ new people, it may decide to advertise the job or position in the appointing page of a newspaper. People who are interested can then apply for the job by sending in a letter of application and curriculum vitae containing details of their education and experience. The company will then draw up a list of candidates, who are invited to attend an interview.

The company will then draw up a list of candidates, who are invited to attend an interview.

The letter of application normally contains three or more paragraphs in which you should:

• confirm that you wish to apply where you learned about the job

• say why you are interested in the position and relate your interests to those of the company

• show what you can contribute to the job by highlighting your most relevant skills and experience

• indicate your willingness to attend an interview

CV includes 6 parts: personal details, education, professional experience, additional skills, interests and references.

6. Markets. Competition. Monopoly

In a market economy, the actions of buyers and sellers set the prices of goods and services. Supply, the quantity of a product that suppliers will provide, and demand, the quantity of a product consumers want, are sides of a market transaction. Suppliers usually want the price that allows them to make the most money Buyers want the price that gives them the most value for the least cost. In the market buyers and sellers meet in person, or they may communicate by letter, by phone or through their agents.

In a perfect market there can be only one price for a given commodity: the lowest price which sellers will accept and the highest which consumer will pay.

In the market systems, competition answers the basic questions of what, how, for whom, and how much. Competition among producers is for the highest profits. Competition among consumers for the best goods and services at the lowest prices.

Monopoly is situation when in some markets there may only be one seller or a very limited number of sellers. It is possible to distinguish in practice four kinds of monopoly.

1) State planning and central control of the economy often mean that a state government has the monopoly of important goods and services.

2) A different kind of monopoly arises when a country, through geographical or geological circumstances, has control over major natural resources or important services. This monopolies can be called natural monopolies.

3) Legal monopolies occur when the law of a country permits certain producers, authors and inventors a full monopoly over the sale of their own products.

4) Next type of monopoly – “the sole trading opportunity” mean when companies obtain complete control over particular commodities. This monopoly is illegal in many countries.

In the most countries anti-monopoly laws operate to restrict such activities.