Exc. 2. Match the words with their definitions.

1) produce a) an amount of money that you must pay to the government

2) money b) when a person has his own company and he produces, buys or sells goods or services

3) tax c) to make things for sale

4) choice d) it helps you to buy things

5) business e) the right to choose between several things

 

Exc. 3. Choose the right variant and complete the sentences.

economist resource employ economy use

1. The system by which a country’s money and goods are produced and used is called....

2. Canada is rich in mineral....

3. The main aim of an... is to study the way in which money and goods are produced and used and the systems of business and trade.

4. I always... this sort of toothpaste.

5. The company... 2000 people worldwide.

Exc. 4. Read and translate the text.

Defining Economics

What do you think of when you hear the word economics? Money, certainly, and perhaps more complicated things like business, inflation and unemployment. The science of economics studies all of these, but many more things as well. Perhaps you think that economics is all about the decisions that governments and business managers take. In fact, economics study the decisions that we all take every day.

Economics is a science concerned with how people use available resources to satisfy their wants through the process of production and exchange.

There have been many definitions of economics in the past. The earliest definitions envisaged economics as the study of wealth and the older name for economics was “political economy”. Later economics was defined as “the practical science of the production and distribution of wealth”.

At the turn of the 19^th century economists defined economics as a study of man’s actions in the ordinary business of life. At that time economics focused on how men got their incomes and used them.

In more recent years, the subject of economics was defined more precisely as “the science which studies human behavior as a relationship between ends and scarce means which have alternative uses”.

Today economics deals with data on income, employment, expenditure, prices, production, consumption, transportation and trade.

 

Exc.5. Discuss the following:

- What does economics study?

- Does it study only such things as business, inflation, money?

- What is economics as a science concerned with?

- What is the earliest definition of economics?

- What definition of economics do you like more?

- What does e conomics deal with today?

Part I

Text 1. Basics of Economics

Task 1. Read and translate the text, paying attention to the italicized words.

The study of the choices people make in an effort to satisfy their wants and needs is called economics. Wants and needs refer to people’s desires to consume certain goods and services. In economic terms, a good is a physical object that can be purchased. A record, a house, and a car are examples of a good. A service is an action or activity done for others for a fee. Lawyers, plumbers, teachers, and taxicab drivers perform services. The term product is often used to refer to both goods and services.

The people who wish to buy goods and services are called consumers and the goods that they buy are called consumer goods. The people who make the goods and provide services that satisfy consumers’ wants and needs are called producers.

Economists generally classify as needs those goods or services that are necessary that are necessary for survival. Food, clothing, and shelter are considered needs. Wants are those goods or services that people consume beyond what is needed for survival.

The need for making choices arises from the problem of scarcity. Scarcity exists because people’s wants and needs are greater than the resources available to satisfy them. Thus people must choose how best to use their available resources to satisfy the greatest number of wants and needs.

A resource is anything that people use to make or obtain what they want or need. Resources that can be used to produce goods and services are called factors of production.

Economists usually divide these factors of production into three categories: (1) natural resources, (2) human resources, (3) capital resources. Today many economists have added technology and entrepreneurship to this list.

Natural Resources

Items provided by nature that can be used to produce goods and to provide services are called natural resources. Natural resources are found in/or on the earth or in the earth’s atmosphere. Examples of natural resources on the earth are fertile land, vegetation, animals, and bodies of water. Minerals and petroleum are examples of natural resources that are found in the earth. Atmospheric resources include the sun, wind and rain. A natural resource is considered a factor of production only when it is used to produce goods and to provide services.

Human Resources

Anyone who works is considered a human resource. Any human effort that is exerted in production process is classified as a human resource. The effort can be either physical or intellectual. Assembly-line workers, ministers, professional sports figures, physicians, store clerks, and sanitation engineers are all human resources.

Capital Resources

The money and capital goods that are used to produce consumer products are called capital resources. Capital goods include the buildings, structures, machinery, and tools that are used in the production process. Department stores, factories, industrial machinery, dams, ports, wrenches, hammers, and surgical scalpels are all examples of capital goods.

Economists make an important distinction between capital goods and consumer goods. Capital goods are the manufactured resources that are used in producing finished products. Consumer goods are the finished products – the goods and services that consumers buy.

Some products can be either capital goods or consumer goods, depending on how they are used. A bicycle purchased for personal use is a consumer good. The same is not true when the bicycle is purchased by a New York messenger service. Because the messenger service will use the bicycle to make deliveries – to provide a service – the bicycle is considered a capital good.

Technology

The use of science to create new products or more efficient ways to produce products is called technology. Technology makes the other factors of production – natural, human, and capital resources – more productive. Technological advances in the computer industry, for example, have increased efficiency in the workplace.

Entrepreneurship

The risk-taking and organizational abilities involved in starting a new business or introducing a new product to consumers are called entrepreneurship. The goal of entrepreneurship is to create a new mix of the other factors of production and thereby create something of value. The entrepreneur is a person who attempts to start a new business or introduce a new product.

 

Essential Vocabulary

entrepreneur – предприниматель

entrepreneurship – предпринимательство

factor of production – движущая сила производства

fee – вознаграждение, гонорар

for a fee – за плату

satisfy – удовлетворять (кого-л.; чьи-л. требования, запросы)

scarcity – нехватка, дефицит

survival – выживание

technological advances – технический прогресс

technology – техника, технические и прикладные науки