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Introduction to Economics and management
Fill in the spidergram with the words associated with Economics and Management
Explain your associations.
Discuss the following questions:
1. Why did you decide to be an economist?
2. In your opinion, what does an economist do?
3. Do you know any world famous economists?
Terms and Vocabulary
Exercise 1. Read and remember the pronunciation.
[i:] discipline, principles, briefly, division, decision, deal
[a:] charge, market
[ə:] determine, turn, pursue
[ju:] consumer, produce
[ai] decide, micro-, divide
[k] knit, mechanism
Exercise 2. Pay attention to the stress in the following words.
Exercise 3. Before reading the text tick what statement do you think is true:
1. Economics is only the study of money
2. Economics is something government takes care of
3. An economist basically decides how money is spent
Exercise 4. Read the text, do the exercises
WHAT DOES ECONOMICS STUDY?
Economics is a social science studying economy. Like the natural sciences and other social sciences, economics attempts to find laws and principles of economic functioning of society. Most students who take economics for the first time hardly can imagine the range of questions which this science studies. Some think that economics will teach them about the stock market, or what to do with their money. Others think that economics deals exclusively with problems like inflation and unemployment. In fact, it deals with all these subjects but they are parts of a much larger system.
Economics has deep roots in and close ties to, social philosophy. An issue of great importance to philosophers, for example, is distributional justice. Why are some people rich and others poor, and whatever the answer, is this fair? A number of nineteenth century social philosophers were trying to solve these questions and out of their speculations a separate discipline was born, namely economics. If you want to get quick idea of what economics studies, you should explore briefly the way economics is organized.
First of all, there are two major divisions of economics: microeconomics and macroeconomics. Microeconomics deals with the functioning of individual industries and the behaviour of individual economic decision making units: single business firms and households. Macroeconomics explores the decisions that individual businesses and consumers make. The choices of firms about what to produce and how much to charge and the choices of households about what to buy and how much of it to buy help to explain why the economy produces the things it does.
Another big question that microeconomics addresses is who gets the things that are produced. Wealthy households get more output then do poor households, and the forces that determine this distribution of output are outside the scope of microeconomics. Why do we have poverty? Who is poor? Why do some jobs pay more than others? Why do teachers or plumbers get paid for what they do? Think about all the things we consume in a day on the scale of a town, a whole country. Somebody decided to build the factories. Somebody decided to construct roads, build the housing, produce the cars, knit the shirts, and smoke the bacon. Why? What is going on in all those buildings? It is easy to see that understanding individual micro decisions is very important to any understanding of your society. Macroeconomics, in its turn, deals with the functioning of national economic complex and the behaviour of the main classes and social groups.
McConnell C.R., Brae S.L. Economics
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