The economy is a part of our everyday lives. We spend much of our lives working to produce goods and services. We spend a good part of the remaining time consuming those goods and services. Even such simple things as reading, going to university, and lying on the beach can be described as economic activities.
Economics — is the study of economies, the study «what economists do». In general terms, economics is a social science concerned with using scarce resources to obtain the maximum satisfaction of the unlimited material wants of society. It studies the production, distribution, trade, and consumption of goods and services. The aim of economics is to help people to obtain the greatest possible satisfaction or utility out of the resources at their disposal — to do best they can with what they have.
The main questions that an economy must answer are the following:
1. What to produce, and in what quantities?
2. How to produce?
3. For whom to produce?
When economists examine an economy, they not only what to know how the economy answers the three basic questions, but also how well. They focus on the means available for achieving major economic goals. These goals are:
a. Economic growth — the production of more and better goods and services, or a higher standard of living is desired.
b. Full employment — suitable jobs should be available for all who are willing and able to work.
c. Economic efficiency — we want to get the maximum benefits at the minimum costs from the limited productive resources.
d. Price level stability — inflation and deflation should be avoided.
Economists use models to improve our understanding of the world. The basic economic models are: the circular flow diagram and the production possibilities frontier. The circular flow diagram is a model of the economy that shows how money flows through markets among households and firms. In a monetary economy, households, as resource owners, sell their resources to businesses and, as consumers, spend the money income received to buy goods and services. Businesses must buy resources to produce goods and services, their finished products are then sold to households in order to get revenues. The production possibilities frontier is a curve that shows the combinations of output that the economy can possibly produce using the available factors of production — land, labor, and capital. Because resources are scarce, an economy cannot have an unlimited output of goods and services. As a result, choices must be made on which goods and services to produce and which to forgo. Each point on the production possibilities curve shows maximum output of the two products. Limited resources prohibit production of any combination of goods lying outside the production possibilities curve. When an economy is operating efficiently on its frontier, it can only produce more of one good by producing less of others.
To analyze an economy economists use normative and positive economics. Economics is normative when it recommends one choice over another. Should the public sector (government) or the private sector (business) provide extra jobs for unemployed teenagers; tuition ought to be lowered so that more students can obtain an education. Whenever words such as «should» or «ought» appear in a sentence, there is a strong chance you are dealing with a normative statement. Conversely, economics is said to be positive when it describes the facts and the behaviour in the economy. What percent of teenagers are unemployed? If tuition is increased, the number of students will fall. Positive economics is concerned with « what is», while normative — “what ought to be”.
Since the 1930s economics is divided into two parts: macroeconomics and microeconomics. Macroeconomics focuses on the behaviour of an entire economy — the “big picture”. In macroeconomics we worry about such national goals as full employment, control of inflation, and economic growth. The main task of macroeconomics is to understand and improve the performance of the economy as a whole. Microeconomics is concerned with the details of this “big picture”. In microeconomics we focus on the individuals, firms, and government agencies. It concentrates upon the output or price of a specific product, the number of workers employed by a single firm, the revenue or income of a particular firm or household.
V. Give the English equivalents of the following.
Tовари та послуги, виготовляти, споживати, економічна діяльність, суспільна наука, мати справу з, обмежені ресурси, отримувати, бажання, кількість, досягати цілей, рівень життя, повна зайнятість, обмежені продуктивні ресурси, домогосподарства, власник, споживач, дохід, обсяг готової продукції, забезпечувати додаткові робочі місця, безробітний, державні організації.
VI. Fill in the gaps with the words and expressions from the text A.
1. We spend much of our lives working .
2. We spend a good part of the remaining time those goods and services.
3. In general terms, economics is a social science concerned with using______to obtain the maximum satisfaction of ______of society.
4. The aim of economics is to help people satisfaction or utility out of the resources at their disposal.
5. They focus on the means____ major economic goals.
6. We want to get the maximum benefits____ from the limited productive resources.
7. The basic economic models are: the circular flow diagram and_______.
8._________ must buy resources in order to produce goods and services.
9. Because resources are_____ , economy cannot have an unlimited output.
10. When an economy is operating on its frontier, it can only produce more of one good_______ by producing less of others.
11. Economics______ when it recommends one choice over another.
12. Positive economics is concerned with__ .
13. Since the 1930s economics is divided into two parts .
14. The main task of______ is to understand and improve the performance of the economy as a whole.
15. ______ is concerned with the details of this “big picture”.
VII. Find pairs of words as they occur in the text.
1. to produce
a. the facts
2. to obtain
b. best
3. to do
c. goods and services
4. to focus on
d. choices
5. to avoid
e. the means available
6. to improve
f. extra jobs
7. to get
g. inflation
8. to make
h. understanding
9. to provide
i. economic goals
10. to describe
k. revenues
11. to achieve
l. utility
VIII. Answer the following questions.
1.What are economic activities?
2.What does economics study?
3.What are the main questions that an economy must answer?
4.What are major economic goals?
5.What models do economists use to improve our understanding of the world?
6.When is economics said to be normative?
7.What is positive economics concerned with?
8.What are two branches of economics?
IX. Match the following terms with their definitions.
1. economics
a. nominal income adjusted for inflation
2. want
b. money received during given period
3. income
c. the relationship between the input of scarce resources and the resulting output of a good or service
4. economy
d. the study of how best to allocate scarce resources
5. output
e. things to be desired
6. economic growth
f. the satisfaction a consumer obtains from the consumption of a good or service
7. inflation
g. a system for the management and use of resources
8. economic efficiency
h. a rise in general level of prices
9. utility
i. the total amount of the commodities produced
10. real income
k. an increase in real output
X. Fill in the gaps with the words from the list.
economics, economy, economists, economic, economical, to economize.
1. Our firm will try________ , to get the most from what we have.
2. The development of modern_______ began in the 17th century.
3.__________ systems may be classified as traditional, command, or market systems.
4. Since that time_____ have developed methods for studying and explaining how individuals, business and nations use their available resources.
5. Macroeconomics is the study of the________as a whole.
6. We are establishing a new_______ technology.
XI. Translate into English.
1. Інфляція — це процес підвищення середнього рівня цін в економіці.
2. Безробіття є макроекономічною проблемою.
3. У процесі економічного розвитку країн відбуваються періодичні спади та підйоми .
4. Економічна теорія досліджує поведінку людей у процесі виробництва, обміну, розподілу і споживання матеріальних благ та послуг в умовах обмежених ресурсів.
5. Під економічним зростанням розуміють збільшення реального доходу, випуску продукції в економіці.
6. Макроекономіка — розділ економічної теорії, який вивчає економіку як єдине ціле.
7. Нормативна макроекономіка — це сукупність уявлень стосовно того, якою має стати економіка. Позитивна макроекономіка прагне дати відповіді на запитання, якою є макроекономічна ситуація в країні.
8. Ми не зможемо виготовляти все, що ми бажаємо, оскільки ресурси завжди обмежені.
9. Чинники виробництва — це земля, трудові ресурси та основний капітал.
10. Модель кругообігу описує потік ресурсів, товарів і послуг, якими обмінюються домогосподарства і фірми.
XII. Match the equivalents before reading.
1.to earn a living а. виживання
2.required subject b. ресурси які не відновлюються
3.simplified с. заробляти на життя
4.don't mind d. не заперечувати
5.to put in a financial bind e. приймати рішення
6.by some stroke of magic f. приділяти час
7.human nature being g. необхідна дисципліна
8.to make decisions h. бути змушеним
9.to draw attention to і. задовольняти бажання
10.nonrenewable resources j. споживати більше ніж
11.exhausted k. усвідомлювати
12.to satisfy wants l. переключити увагу
13.to be forced m. виснажений
14.to be aware n. помахом чарівної палички
15.to devote time о. людська натура
16.wants and needs p. виробнича потужність
17.to consume beyond... q. бути готовим та спроможним
