In studying economics, as in any other activity, we like to have some reason for exerting effort. We attend the theatre or go to a ball game because it is enjoyable. We attend school to learn or to make it possible to have a job and earn a living. But why study economics? There may be a few people who would be willing to study economics purely for the enjoyment it brings. For most, however, learning economics is not 100 percent entertainment. We study economics because it is a required subject. Why is it required? The answer can be simplified to a single word- scarcity. Scarcity exists because people's wants and needs are greater than the resources to satisfy them. Thus people must choose how best to use their available resources to satisfy the greatest number of wants and needs.
Economists classify as needs those goods or services that are necessary for survival. Food, clothing, and shelter are basic needs. Wants are those goods or services that people consume beyond what is needed for survival. When people as the consumers are willing and able to buy desired things they present demand at the market.
At first you may find this hard to believe that human wants are unlimited. But if you spend a few minutes to write a list of the goods or services that you wouldn't mind having, you will understand that their purchase would put a millionaire in a financial bind. Of course, there is some level of income or standard of living where one would be completely satisfied. Suppose by some stroke of magic that you got all the items on your list. Would you be completely satisfied? Probably not — human nature being is what, we always seem to be a little dissatisfied with what we have. A new compact car may satisfy for a time, but we give admiring glances to a Mercedes or a BMW.
It is less difficult to understand the scarcity of resources at our disposal. In recent years, attention has been drawn to the day when our nonrenewable natural resources, especially fuels, will be exhausted. It is important to realize that most resources, including land, labour, and capital are limited. The result is a limit to a country's productive capacity.
Since human wants are greater than the resources to satisfy these wants, people must decide what they will produce and what they forgo. In other words, we are forced to make economic decisions. We must make these decisions (or, if you wish, economize) from the time we are aware of the world around us. But not all economic decisions involve money. The best example of a non- monetary economic decision is how we allocate our time. The student must decide if he or she will spend the evening studying mathematics or economics, or whether to devote time to study or leisure.
More traditional types of economic decisions involve activities of households and firms. For the households economic decisions must be made on how much money goes to housing, food, clothing, entertainment, transportation, and so forth. For the firms they must decide what items should produce. Should they produce a large number and sell at a low price or produce less and sell at a high price.
XIV. Find in the text.
1. Words concerned with economics.
2. Three word partnerships, with their equivalents in Ukrainian.
3. Three large expressions, with their equivalents in Ukrainian.
XV. Find the words in the text that mean.
1. piece of work, either to be done, or completed
2. money received during a given period
3. a desire for...
4. requirement
5. wealth, raw materials which a person, country has
6. continue to live or exist
7. what has use, worth, value
8. system or arrangement that supplies public needs
9. used up completely
10. settlement of a question
11. not available in sufficient quantity
12. use or spend less than before
XVI.Translate the following into Ukrainian.
1. Economics is the study of how people, individually and collectively, allocate their limited resources to try to satisfy their unlimited wants.
2. Scarcity occurs because human wants exceed the production possible with our limited time and resources.
3. Agoodis any item or service that satisfies a human want and, in so doing, adds to human happiness.
4. Production entails using technology to apply energy to materials in ways that make the materials more valuable, or that otherwise help satisfy human wants.
5. Labourresources are the physical and mental talents that people can make available for production.
6. Opportunity costis the value of the best alternative surrendered when a choice is made.
7. Absolute pricesare prices in terms of some monetary unit.
8. Relative pricesare the prices of goods or resources in terms of each other, and are computed by dividing their absolute prices by one another.
9. Economic efficiencyis achieved when we produce the combination of outputs with the highest attainable total value, given our limited resources.
10. Inputsare resources used in the production process, such as labour and raw or semifinished materials.
11. Outputsare transformed materials; the results of production.
12. Demandis the quantity of a specific good that people are willing and able to
buy during a specific period, given the choices available.
13. Supplyrefers to the quantity of a specific good that sellers will provide under alternative conditions during a given period.
14. Market equilibriumoccurs at the price-quantity combination where the quantities demanded and supplied are equal.
15. Asurplusis the excess of the quantity supplied over quantity demanded when the price is above equilibrium.
16. Gross Domestic Product (GDP) is the total market value of goods and services produced within a country during some period, usually one year.
17. Gross National Product (GNP)is the value of all output produced by resources owned by the citizens of a country.
18. Economic growthis a positive quantitative change in an economic system; occurs when a society acquires greater productive capacity that can be used for consumption or investment.
19. Capitalis all physical improvements made to natural resources that facilitate production, including buildings and all machinery and equipment.
20.Wealthis the value of the assets owned by an individual or a group of individuals.
