UNIT 8
Producers & consumers
Once people could only trade what they could produce with
their hands or find in nature for things that other people had
made or found. Then money became a medium of exchange1
and economic systems were created. Today, developments in
industry and technology have enabled vast quantities of goods
to be manufactured, transported, and traded, and a range of
services like insurance, banking and retail have also appeared.
In the digital age, services such as online shopping have made
selling goods even easier and trade is now more global than
ever. Have these transformations made our lives better?
The most obvious benefits of trade relate to consumer choice2.
There are so many goods and services to choose from that
shopping has now become a leisure activity for many people.
The internet has also allowed shoppers to compare prices and
choose the best deal. However, there are winners and losers;
not all consumers have enough disposable income to be able
to enjoy the choice available. Advertising and the media have
contributed to a culture of consumerism3, in which unhealthy,
materialistic lifestyles are encouraged. The over-use of credit
cards and loans can result in debt, which allows banks to make
further profit through interest payments and fees.
Not all products are beneficial to society. In their urge to
satisfy consumer demands, companies may manufacture
products that are bad for consumers; such as highly refined
foods with too much sugar or salt. And it isn’t just the goods
themselves that may have negative effects. Our inability to
recycle much of what we produce, and surplus, caused by
Foundation IELTS Masterclass: Unit 8 Worksheet
over-production, can lead to unwanted packaging and unsold
goods. If this waste is not properly disposed of it can end up
polluting the land and the oceans, killing plants and animals.
Manufacturing uses precious natural resources, too, and
transporting goods across vast distances consumes energy.
It could be argued that trade has helped to promote good
international relations. In order to have international trade
we have to work to understand and trust other countries
and discuss each other’s needs. Trade relationships mean
that maintaining peace is in the economic interests of
most countries. Trade sanctions may be used to encourage
nations to treat each other with respect in preference to more
aggressive acts, such as declaring war.
Governments may also choose to regulate the behaviour of
large companies to prevent them from competing unfairly
with smaller ones. Large companies often benefit from
economies of scale, meaning that it is cheaper for them to
produce things because their costs are spread over many
more items. They are also in a stronger position to negotiate
cheaper prices from suppliers. If a company becomes too big,
it can reduce the level of competition in the market and lead
to unfairly high prices. Large multinational businesses also
sometimes avoid paying tax, for example by locating their
offices in countries with low or zero rates of tax.
It is possible to reduce the negative effects of ‘free trade’ by
setting minimum wages, nationalizing certain companies
(often utility providers), giving subsidies to smaller, local
suppliers and lowering tax rates for small or local businesses.
Although these regulations may help, the financial influence
of large companies and the risk of preventing market growth
can mean governments don’t regulate fairly. For example, they
may avoid closing tax loopholes. Finally, regulations designed
to help small businesses can actually harm them, because
they often require businesses to make expensive and time-
consuming changes to the way they run.
1 See Student’s Book pages 84–5 for discussion about further advances in
production.
2 See Student’s Book pages 82–3 for discussion about the benefits of
choice.
3 See Student’s Book pages 80–1 for further discussion on consumerism.
Photocopiable  © Oxford University Press 1
Vocabulary
1 Match the definitions with a word or phrase in
bold from the text.
1 something which takes a lot of time
2 when the costs of production drop when you make a
large number of something
3 an amount of money that you owe
4 the fees that you pay in order to borrow a large amount
of money
5 something which exists in many countries
6 money paid by the government to industries to keep
prices low
7 the lowest amount of money that an employer is
allowed to pay an employee
8 putting an industry or company under government
control
9 money that someone is free to spend after paying tax
10 an amount that is more than you need
11 to control something using rules
12 official orders that prohibit trade with a particular
country
13 mistakes in the way laws have been written that allow
people to legally avoid paying tax
2 Choose the correct option to complete each
sentence.
1 Consume / Consumerism / Consumption of manufactured
goods has increased in most countries.
2 Companies that produce / production / product large
quantities of goods can often do so more cheaply than
smaller companies.
3 The supply / supplying / suppliers of agricultural goods is
sometimes greater than the demand.
4 The government’s economic / economy / economical
plans have been criticized by many people.
5 Materialism / Materialistic / Material attitudes are
associated with people who value possessions and
money a great deal.
6 Utilitarian / Utilization / Utility companies supply services
such as water, gas and electricity.
Foundation IELTS Masterclass: Unit 8 Worksheet
IELTS training
3 Complete the text below. Choose UP TO THREE
WORDS from the passage for each answer.
In the past, people used to only buy the things they
needed, but many would now consider shopping to be
1
. Often they buy goods with credit
cards, which can result in high 2 .
As companies try to meet consumer needs they generate
excess packaging and goods, creating unnecessary
3
, which we then have to get rid
of. The production of goods is also often a drain on
4
.
Trade also has a role to play in 5 .
Sanctions, for example, are often preferable to war
and other types of conflict. Many people also think
it is necessary to 6 companies
that operate globally to ensure that markets remain
competitive, but governments are sometimes
reluctant to do this if these companies have significant
7
. And even though they are designed
to help them, regulations can sometimes be bad for
8
.
Mini debates
4 Discuss three of questions 1–6. Give reasons to
support your view.
1 Does international trade have more drawbacks than
benefits?
2 Do large companies have a duty to fund community
projects?
3 People on low wages should just get better jobs. Do you
agree?
4 How has the internet affected trade?
5 Is it a good idea to buy things with credit cards?
6 Can we trust companies to behave in a way that is good
for society?
Photocopiable  © Oxford University Press 2