Topic: Economics.

Key Economic Notions

Vocabulary

to distribute – розподіляти;
scarcity - дефіцит,нестача;
to provide – забезпечувати;
supply –постачання;
demand– попит;
interrelationships - взаємозв’язок;
consumer– споживач;
income - прибуток, надходження;
resource endowments - вкладання ресурсів;
unemployment – безробіття;
living standards – життєві стандарти;
consumption– споживання;
expenses– витрати;
economy– економіка;
economics – економіка ( навчальна дисципліна);
economic – економічний;
economical– економний;
distinction– відмінність;
the basis for analysis – підґрунтя для аналізу;
efforts– зусилля;
scarce resources – мізерні ресурси.

Read the text and be ready to further discussion.

3Economics is a social science, like history, geography, politics, psychology

and sociology. It is the study of human efforts to satisfy unlimited and competing
wants through the careful use of relatively scarce resources. The subject matter of
economics is society itself. It studies the most important aspects of our life linked
with production, distribution, exchange and consumption of welfare; wages and
earnings, unemployment, inflation, government spending, taxation and regulation,
international trade, and the distribution of material wealth in the country and
throughout the world. Therefore we can define economics as «the study of
mankind in the everyday business life».
Economics is the study of how goods and services 'get produced and how
they are distributed.2 By goods and services economists mean everything that can
be bought and sold. By produced they mean the processing and making of goods
and services. By distributed they mean the way goods and services are divided
among people.
5All economic questions arise from the fundamental fact of scarcity. Nature
does not provide all of the things society wants. We must decide what, how and for
whom to produce. The ability of producers to provide goods and services to
individuals at various prices is broadly covered by the concept of supply. The
desire by individuals to consume goods and services at various prices is broadly
covered by the concept of demand. Thus, all areas of study in economics can be
classified into those under the heading of supply, those under the heading of
demand and those based on interrelationships between supply and demand.
4There are two sides to the study of economics - microeconomics and
macroeconomics. 6Microeconomics is concerned with individual products and
decisions made by individual firms and consumers. 7Macroeconomics is
concerned with the functioning of the overall economy.
Microeconomics is divided into several categories of decision making.
6Microeconomics is first concerned with the choices individuals make in
determining how to spend their income. Second, microeconomics deals with how
individuals decide on the quantity of the labour or other resource endowments,
such as capital, or land, that they wish to sell to firm in exchange for income.
7Macroeconomics is concerned with the problems of economic growth,
unemployment and inflation. Each of these factors is an indication of the overall
state of the economy and how fully resources are utilized. Higher economic growth
generally implies higher living standards. 8Lower unemployment suggests that
society is making good use of its labour resource. 9Low rates of inflation reflect
stable valuations of goods and services in terms of money.
10So, the major distinction between micro- and macroeconomics analysis is
in the groups that are the focus of study in each branch. In microeconomics,
individuals and firms are the main agents whose actions arc analyzed. In
macroeconomics, the actions of broad groupings such as all consumers,
government, and all investors - form the basis for analysis.

I. Answer the following questions:

1. What is the difference between economy and economics?
2. What do economists mean by goods and services?
3. What kind of science is economics?
4. What are two sides to the study of economics?
5. Why do economic questions arise?
6. What is microeconomics concerned with?
7. What is macroeconomics concerned with?
8. What does lower unemployment suggest?
9. What do low rates of inflation reflect?
10. What groups are the focus of study in microeconomics and
macroeconomics?

II. According to the text, are the following statements true or false? If they
are false, give the correct statement:
1. The subject matter of economics is unemployment.
2. Economics is the study of how goods and services 'get produced and
sold.F
3. All economical questions arise from the fundamental fact of scarcity T
 4. We can define economics as «the study of mankind in the everyday
business life». F
5. Some areas of study in economics can be classified into those under the
heading of supply, those under the heading of demand and those based on
interrelationships between supply and demand.
6. Macroeconomics is concerned with the choices individuals make in
determining how to spend their income. F
7. Low rates of inflation reflect stable valuations of goods and services in
terms of money. T
8. Nature provides all of the things society wants. F

III. Translate the following sentences into English:

1.Бажання людини безмежні, а кошти, необхідні для здійснення цих
бажань, надто обмежені.
2. Перед кожним суспільством постає проблема нестатку.
3. Економічні чинники впливають на рішення у світі бізнесу.
4. Ресурси, необхідні для утворення товарів і послуг, називають
чинниками виробництва.
5. Заробітна плата — це та винагорода, яку отримують робітники за
свою працю.
6. Купуючи фабрики, машини та інші засоби виробництва, ділові люди
часто вживають термін «капітал».
7. Економіка — це наука, яка описує та аналізує вибір з-поміж
недостатніх ресурсів, які мають задовольнити потреби населення.
8. Кожний чинник виробництва має місце в нашій економічній системі
і кожний виконує відповідну функцію.

IV. Match the words with their definitions:

1.economics G a)something in short supply; not enough to meet

demand;
2. production b)activity of buying and using goods;
3. distribution c)the creation of services or the changing of materials
into products;
4. exchange d)the activity of selling goods and services in order to
make a profit;
5. consumption e)the production, distribution and sale of goods and
services for a profit;
6. business f)the movement of finished products from the
manufacturing location to the market place;
7. trade g)the social science that describes and analyses how
society chooses from among scarce resources to satisfy
its wants;
8. scarce h)the process of trading or bartering one unit or set of
 goods or services for another unit or set;
9. market i)one of many varieties of systems, institutions,
procedures, social relations and infrastructures whereby
parties engage in exchange;
10.profit j)the difference between a firm's total revenue and all
costs;
11.resource k)the amount of goods and services, by a firm, industry,
or country;
12.output 1)a source or supply from which benefit is produced.

V. These pairs of words often cause problems. Choose the correct

alternative for each:
1. Economic / economics
a) She studied … at university and is now an economist with a big
international bank.
b) She analyses the general … problems faced by companies operating
within traditional industries like shipbuilding.
2. Economy /economies
a) Their government is trying to liberalize the … while keeping tight
political control.
b) Overheads are getting out of control and we need to make major… right
across the business.
3. Economic / Economical
a) Prices are rising and the number of jobs is falling. It's not just a business
problem, it's general … problem.
b) This car uses less petrol than the other one so this one is the more … .
4. Production / Productivity
a) We'll increase pay if the employees raise their … .
b) If we don't get another order soon, we'll have to cut … and maybe
close the factory.
5. Expenses / Expenditure
a) We have to reduce our general … : we must cut costs wherever we can.
b) Andrew must cut his travel, accommodation and entertainment … : he'll
have to stay in cheaper hotels and take clients to cheaper restaurant.
6. Take over / overtake
a) They want to…our company but I don't think their offer is high enough
for our shareholders to sell.
b) They expect to_ … all their main competitors, in terms of sales, within a
year of the launch of their new product.
7. Basis / Basic
a) He only speaks … English: it's sometimes difficult to understand what he
is trying to say.
b) Well, I think we have a good … for discussion after lunch.
8. Raising / Rising
 a) Prices are … at a rate of about 4% per year.
b) The company is … its prices by 5% this year.

VI. Put the right word from the box in the sentences. Use the same words
more than one time:

Economics, economic, economists, economists, economize, economical,

economy, economically.

1.The study of … is of great use even to those students who have no wish to
become professional.
2. … recommendations may be of high value to governments but
governments do not always rely on them.
3.You can_ … if you compare the prices of goods before buying them.
4._J.M. Keynes and K. Marx were two famous … .
5.If you've got a large family, it's more … to travel by car than by train.
6.The_system of country is usually called the national … .
7.The people in that town live very … .
8.An early definition of … was «an inquiry into nature and causes of the
wealth of nations».
9.The aim of that book is to form a theory of the role of government in …
life.
10. The … are monitoring the prices and levels of consumption of different
goods and services.

VII. Fill in the gaps with appropriate words from the box:

Scarcity, wages, interest, rent, choices, systems, resources

1.The price paid for the use of labor is called ... .

2.Traditional economic ... are usually found in the more remote areas of the
world.
3.Payment for the use of someone else's money, or capital, is called ....
4.... exists because human wants are virtually unlimited, whereas the
necessaries to satisfy those wants are limited.
5.The ... or factors of production as they are called, are land, labor, capital
and entrepreneurship.
6. Everyone goes through life having to make ... .
7. The price paid for the use of land is called …
VIII. Read and dramatize the following dialogue:

P.; Hello, Bob!

S.: Oh, Peter, glad to see you. Haven't seen you for a long time. What have
you been busy with, and what are you doing now?
P.: I'm a student of the Kyiv University. And what about you?
S.: You know, when I received my school leaving certificate, I decided to
work at a plant and get a specialty.
P.: What specialty have you got?
S.: I'm a fitter now, I get good wages and I can support my mother. And now
that I have become a skilled worker I think already I can combine my job with
studies by taking correspondence courses or attending the evening faculty of an
institute.
P.: What institute do you want to enter?
S.: I have thought about the Cherkassy Engineering and Technological
Institute, but I haven't yet decided. I'd like to become an economist.
P.: Is it really interesting for you?
S.: Oh, yes, of course. I know that the studying of economics will help us to
understand the economic forces better and enable us to live a fuller life.
P.: Do you know what is the basic economic problem?
S.: I think I do. The central problem of economics is to determine the most
efficient ways to allocate the factors of scarcity created by society's unlimited
wants and limited resources.
P.: But in doing so, every society must provide answers to the following
three questions:
— What goods and services are to be produced and in what qualities are
they to be produced?
— How are those goods and services to be produced?
— Who will receive and consume (get to use) those goods and services?
S.: You are right. The way in which a society goes about answering these
fundamental questions is known as its economic system. I'd like to study the
economic system of our country.
P.: Now I understand you and I hope you will enter the institute and become
a very good economist.
S.: Well, I am a bit hungry, why don't we have a snack together?
P.: Good idea. Let's go and have a snack in the cafe