Exercise 1
Diamonds are very expensive for several reasons. First, they are difficult to find. They are only found in a few
places in the world. Second, they are useful. People use diamonds to cut other stones. Third, diamonds do not
change. They stay the same for millions of years. And finally, they are very beautiful.
Exercise 2
There are many different kinds of pollution. One kind is air pollution. This usually is a problem over cities.
Water pollution is another problem. It is found in rivers, lakes and oceans. Also, pollution of the earth is
sometimes a problem near farms. And finally, there is even noise pollution, especially in crowded cities.
Exercise 3
The Price of Gold
The attraction of gold is as old as history. Since ancient times, gold has been the object of dreams and
obsessions. Western literature is full of characters who kill for gold or hoard it, from King Midas in the
ancient Greek myths, to Fagin in Dickens' Oliver Twist. These characters go to evil extremes to get or keep
their gold and they get the punishment they deserve. Most people would not be willing to go to such
extremes, of course, but they would not question the assumption that gold has lasting value above and beyond
any local currency. Societies change over time, customs and currencies evolve, but gold remains. A wedding
ring, for example, must be gold, and so should any serious gift of jewelry. In fact, giving and wearing gold is
still a mark of prestige in our postindustrial society, just as it has been for thousands of years.
Why is gold so valuable? True, it is shiny, durable, and rare, but it is far less useful than many other
minerals or metals. It is also not like stock in a company, where the value of the stock depends on the
performance of the company. Gold, on the contrary, like any currency, is valuable precisely because people
believe it is valuable. That is, if people were willing to accept seashells for their labor and could use them to
pay for food, fuel, and other commodities, then seashells would become a valuable currency. Thus, the value
of gold depends on the collective belief that gold will continue to be valuable. As long as demand for gold
remains steady, the price will hold steady; if demand is high, it will continue to increase in value. But if people
should someday lose faith in gold, the price of gold could fall sharply.
Another factor that has affected the price of gold has been the increasing difficulty in acquiring it.
Today, most of the gold left in the ground is in microscopic pieces mixed with rock. To get it, miners must
dig up tons and tons of rock, and then spray it with diluted cyanide (a poison) to separate out the gold. For
one ounce of gold—a wedding ring, for example—the mine processes about 30 tons of rock. This is already a
costly operation. But there are also hidden social and environmental costs. The mining and processing of gold
is ruinous to the environment and to the health of people living nearby. Most of these mines are in poor
regions where the people have had little voice in whether there should be mines and how the mines should be
run. The large multinational mining companies simply bought the land and opened the mines. However, as
people and governments begin to realize the extent of the damage caused by the mines, the situation might
change. Indeed, if the mining companies ever have to pay the full environmental and social costs of mining
gold, the price of gold is likely to climb yet higher.
Exercise 1Diamonds are very expensive for several reasons. First, they are difficult to find. They are only found in a fewplaces in the world. Second, they are useful. People use diamonds to cut other stones. Third, diamonds do notchange. They stay the same for millions of years. And finally, they are very beautiful.Exercise 2There are many different kinds of pollution. One kind is air pollution. This usually is a problem over cities.Water pollution is another problem. It is found in rivers, lakes and oceans. Also, pollution of the earth issometimes a problem near farms. And finally, there is even noise pollution, especially in crowded cities.Exercise 3The Price of GoldThe attraction of gold is as old as history. Since ancient times, gold has been the object of dreams andobsessions. Western literature is full of characters who kill for gold or hoard it, from King Midas in theancient Greek myths, to Fagin in Dickens' Oliver Twist. These characters go to evil extremes to get or keeptheir gold and they get the punishment they deserve. Most people would not be willing to go to suchextremes, of course, but they would not question the assumption that gold has lasting value above and beyondany local currency. Societies change over time, customs and currencies evolve, but gold remains. A weddingring, for example, must be gold, and so should any serious gift of jewelry. In fact, giving and wearing gold isstill a mark of prestige in our postindustrial society, just as it has been for thousands of years.Why is gold so valuable? True, it is shiny, durable, and rare, but it is far less useful than many otherminerals or metals. It is also not like stock in a company, where the value of the stock depends on theperformance of the company. Gold, on the contrary, like any currency, is valuable precisely because peoplebelieve it is valuable. That is, if people were willing to accept seashells for their labor and could use them topay for food, fuel, and other commodities, then seashells would become a valuable currency. Thus, the valueof gold depends on the collective belief that gold will continue to be valuable. As long as demand for goldremains steady, the price will hold steady; if demand is high, it will continue to increase in value. But if peopleshould someday lose faith in gold, the price of gold could fall sharply.Another factor that has affected the price of gold has been the increasing difficulty in acquiring it.Today, most of the gold left in the ground is in microscopic pieces mixed with rock. To get it, miners mustdig up tons and tons of rock, and then spray it with diluted cyanide (a poison) to separate out the gold. Forone ounce of gold—a wedding ring, for example—the mine processes about 30 tons of rock. This is already acostly operation. But there are also hidden social and environmental costs. The mining and processing of goldis ruinous to the environment and to the health of people living nearby. Most of these mines are in poorregions where the people have had little voice in whether there should be mines and how the mines should berun. The large multinational mining companies simply bought the land and opened the mines. However, aspeople and governments begin to realize the extent of the damage caused by the mines, the situation mightchange. Indeed, if the mining companies ever have to pay the full environmental and social costs of mininggold, the price of gold is likely to climb yet higher.
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