Economic Models and Theories

ДОМАШНЕЕ ЗАДАНИЕ ДЛЯ СТУДЕНТОВ ЗАОЧНОГО ОТДЕЛЕНИЯ НАПРАВЛЕНИЯ 38.03.01 «ЭКОНОМИКА» и 38.05.01 «ЭКОНОМИЧЕСКАЯ БЕЗОПАСНОСТЬ»

(к учебнику Ch.St.J.Yates

Семестр)

Группа 1.

Задание 1. Перевести письменно текст из учебника Yates со страницы 1-4 (Three economic issues).

Задание 2. Найти в тексте следующие слова и письменно перевести их. Перевод слов должен соответствовать тексту.

an instruction manual; to make sense; to allocate scarce resources; oil and its derivatives; basic inputs; household products; utensils; in comparison with; cheap and abundant; abrupt change; to encourage; on an assumption; cutbacks in the quantity demanded; small reduction in sales; the upheaval price shocks inflicted; commuters form car-pools; to bid up prices; to contemplate solar energy; a shift away from expensive oil-using products towards less oil-intensive substitutes; ripples throughout the entire economy; price slump persists

Задание 3. Найти слова в тексте и написать их перевод на английский язык.

использование нефти неуклонно росло; предметы домашнего обихода; экономическая деятельность; увеличить(поднять) цену; экономить на чем-то; предвидеть, предсказывать; быть зависимым от нефти; существенное повышение цен; искусственные заменители; реагировать на цены; увеличиваться в шесть раз; производственный процесс; экономичное воздушное судно; размышлять, обдумывать; выросший (увеличившийся) доход; сложная, взаимозависимая система; возмущение, беспокойство (сбой); расширяться; сокращаться; привлекать дополнительные трудовые ресурсы.

Задание 4. Для каждого из утверждений подберите соответствующий параграф (написать номер параграфа).

1 the introduction of the notion oil price shocks

2 the way economies performed before the oil price shocks

3 substitute commodities change the structure of production

4 countries which are better off in comparison with the rest of the world

5 high oil prices make producers economize on oil consumption

6 countries which gained large profits from the oil price increases of 1973-74

Задание 5. Верно или неверно?

1 From the start of the century until 1973 the price of oil increased steadily in comparison with the prices of other commodities.

2 The OPEC forecast that potential oil substitutes would not negatively affect the quantity demanded on the oil market.

3 Basic economic issues are generally settled by the guidance of price changes.

4 Higher oil prices lead to reduction in consumption of coal.

5 Less expensive oil substitutes make oil prices lower.

Группа 2.

Задание 1. Перевести письменно текст из учебника Yates со страницы 7-9 (The role of government).

governments provide such services as national defence; the administration of justice; social security; to impose taxes; residual component; to raise tax revenues; correspondingly; the scale of governmental activity; the government ensures...; the regulations the government imposes; safety requirements; to make the economy inefficient; it is commonly asserted

Задание 3. Найти слова в тексте и написать их перевод на английский язык.

налоговая политика правительства; рассмотреть более подробно; противопожарная служба; осуществлять трансфертные платежи; пособия по безработице; продовольственные карточки; расходы правительства финансируются путем налогообложения; правительственный заем; в конце концов, наконец; выплаты по социальному обеспечению; гарантировать

Задание 4. Для каждого из утверждений подберите соответствующий параграф (написать номер параграфа).

1 high taxes are a disincentive to people

2 the source of government finance

3 governments control what and for whom to produce

4 governments set rules for businesses

5 different scales of government activity in the economy

6 the list of government´s functions

Задание 5. Верно или неверно?

1 Government expenditure is mainly subsidized through government borrowing.

2 Big-government countries normally lessen the tax burden upon their people.

3 Japan spends more money than Italy on social welfare.

4 Nowadays most economies tend to reduce the government sector in their structures.

5 Social payments provoke people to work more.

Группа 3.

Задание 1. Перевести письменно текст из учебника Yates со страницы 12-13 (The production possibility frontier).

Задание 2. Соедините слова с их значениями (напишите перевод слов 1-5 рядом)

1. facility

2. trade-off

3. yield

4. expense

5. output

a. a an amount of money that you get from an investment, especially bonds

b. the amount of goods or services produced by a person, machine, factory, company

c. a balance between two situations in order to get an acceptable result

d. a place or a large building which is used to make or provide a particular product or service

e. an amount of money that a business or organization has to spend on something

Задание 3. Найдите и соедините синонимы. Напишите рядом перевод слов.

1 feasible a decrease

2 restriction b acquire

3 obtain c additional

4 diminish d constraint

5 extra e possible

Задание 4. Для каждого из утверждений подберите соответствующий параграф (написать номер параграфа).

1 the way workers share their facilities

2 the extreme combinations of employment and production

3 a trade-off between food and film production

4 the introduction of a hypothetical economy

5 diminishing returns occur in both industries

6 the film industry exhibits diminishing returns

Задание 5. Верно или неверно?

1 The more workers there are in the industry, the greater is the effectiveness of production.

2 Each previous additional worker increased the output more than the recently added one.

3 Adding a third worker raises film output by 6 units per week.

4 Output per worker in the film industry remains unchanged as employment rises.

5 With all workers employed in the food industry the economy doesn´t produce films.

Группа 4.

Задание 1. Перевести письменно текст из учебника Yates со страницы 17-18 (The production possibility frontier).

Задание 2. Для каждого из утверждений подберите соответствующий параграф (написать номер параграфа).

1 Efficient and inefficient production points.

2 Impossible output combinations.

3 The point at which the economy has spare resources.

4 The society faces the problem of scarce resources.

5 Feasible combinations of outputs.

6 The society decides what and how to produce.

Задание 3. Сделайте на странице 19 из учебника задание G (верно или неверно).

Задание 4. Верно или неверно?

1 At point G, the economy is not using its resources effectively since it could have more of food only.

2 A feasible combination of output is sometimes inefficient.

3 All points on the curve ensure efficient production combinations.

4 The points that lie outside the PPF can be unattainable but efficient with the given amount of resources.

5 Scarcity of resources makes the society choose between points on and inside the PPF.

Задание 5. Вставьте в текст слова по смыслу

represent, primary, simultaneously, generalized, sacrificed, distribution, the supply, the demand, feasible, satisfies, infeasible, efficiency, simplification

A PPF shows all possible combinations of two goods that can be produced (1___________________) during a given period of time, ceteris paribus. Commonly, it takes the form of the curve on the right. For an economy to increase the quantity of one good produced, production of the other good must be (2_________________). Let´s consider a hypothetical economy where butter production must be sacrificed in order to produce more guns. PPFs (3_______________) how much of the latter must be sacrificed for a given increase in production of the former.

Such a two-good world is a theoretical (4_______________), necessary for graphical analysis. If one good is of (5_______________) interest, all others can be represented as a composite good. In addition, the model can be (6__________________) to the n -good case using mathematics.

Assuming that (7_________________) of the economy's factors of production does not increase, making more butter requires that resources be redirected from making "guns" to making "butter". If production is efficient, the economy can choose between combinations (i.e. points) on the PPF.

Группа 5.

Задание 1. Перевести письменно текст из учебника Yates со страницы 20-21 (The role of the markets).

business can be transacted; remote control; adjustment of prices; to be in the business; rich executives; a suitable part-time job; to cover the costs; to bid up prices; markets involved in your purchase; allocation of scarce resources, the owner of a cafe is in the business; to run a cafe; a part-time job; scarce supplies of beef; adjustments in prices would encourage society to reallocate resources.

Задание 3. Для каждого из утверждений подберите соответствующий параграф (написать номер параграфа).

1. the role of the market in solving the three economic issues

2. the definition of the market

3. different ways of conducting business

4. the reasons for running a business

5. how prices influence the allocation of resources

Задание 4. Верно или неверно?

1. Consumers choose to buy hamburgers instead of steaks because of their lucrative prices.

2. Café owners should pay higher wages to employees since they experience the lack of labour force.

3. Prices which are set once are usually fixed and do not depend on external circumstances.

4. The number of markets involved in the purchase of hamburgers can be unlimited.

5. The general definition of the market is adopted in order to show the role of the market.

Задание 5. Соедините слова с их значениями (напишите перевод слов 1-8 рядом)

1. stock exchange

2. labour market

3. insurance market

4. bond market

5. retail market

6. wholesale market

7. futures market

8. expense account

a. the number of people who are available to work, considered together with all the available jobs

b. a place where goods are sold to the general public for their own use, not for resale

c. the activities connected with buying and selling shares in companies

d. a place where contracts to buy or sell shares, goods, or currency at an agreed price to be delivered in the future are agreed

e. a system that allows you to get back from your employer any of your own money that you have spent while working

f. selling goods (especially in large quantities) to shopkeepers, for sale to the public

g. a place where interest-bearing securities, redeemed after a fixed period, are traded

h. a place where financial protection for property, life, health, etc. against specified risks (accident, fire, theft, loss, damage, death, etc.) is provided

Группа 6.

Задание 1. Перевести письменно текст из учебника Yates со страницы 25-27 (Positive and normative economics).

Задание 2. Найдите и соедините синонимы. Напишите рядом перевод слов.

1. check-up

2. proposition

3. competent

4. regard

5. persuasion

a) sufficient

b) examination

c) consider

d) belief

e) assertion

Задание 3. Найдите и соедините антонимы. Напишите рядом перевод слов.

1. competent

2. regard

3. positive

4. proposition

5. desirable

a) normative

b) rejection

c) undesirable

d) incompetent

e) neglect

Задание 4. Для каждого из утверждений подберите соответствующий параграф (написать номер параграфа)

1. the difference between two branches of economics

2. discussion of arguable points moves investigation ahead

3. definitions of positive and normative economics

4. how one branch of economics influences the other

5. different political views cannot prevent s cientists from coming to an agreement

Задание 5. Вставьте слова в текст

The economic science 1 ________ scientific, i.e. objective explanations of how the economy functions. In this 2 _______ it applies the 3 ________ approach where economists study what it is and what it can be in reality. If an issue in positive economics is scientifically proved, there is no place to any 4 _________ left. But there can be different 5 ________ views on 6 _______ problems which provide 7 _______ for further research. Economists may have their own 8 ______ judgements on economic issues. Here they deal with 9 _______ economics where it becomes difficult to 10 _______ disputes. However, positive economics shows the distinct 11 _______ of how to make a normative choice.

A. disagreement B. imply C. subjective D. scope

E. clarify F. claims G. searches for H. unresolved

I. implications J. regard K. positive L. value

M. persuasion N. normative

Группа 7.

Задание 1. Перевести письменно текст из учебника Yates со страницы 29-31 (MICROECONOMICS AND MACROECONOMICS).

what distinguishes these economists; as viewed bу firms; congestion; to classify branches of economics; to cut across the large number of subject groupings; relative output; sophisticated branch; extends this approach; keep the analysis manageable; to study every market fоr every commodity; without distorting the rea1ity; to lose track of the phenomena; а task that retains an element of art in economic science.

Задание 3. Найти слова в тексте и написать их перевод на английский язык.

специализироваться в какой-то конкретной области экономической науки; область экономической теории, изучающая проблемы города; процитированный выше; детальное, подробное рассмотрение; обобщить поведение фирм; сравнительная цена; модель потребления и производства; придумать разумное упрощение; теория общего равновесия; без сильного искажения действительности; ученые идут различными путями; деление товаров на категории; сохранить простоту анализа; подчеркивает, делает акцент на взаимодействия в экономической жизни.

Задание 4. Для каждого из утверждений подберите соответствующий параграф (написать номер параграфа).

1. the classification of goods into some categories

2. the division of the sciences into branches

3. the difference between microeconomics and macroeconomics

4. the importance of some phenomena depending on circumstances

5. the problems of the city

Задание 5. Верно или неверно?

1. The classification of economics into microeconomics and macroeconomics is much wider than that which is done when studying a segment of the economy.

2. Microeconomics cannot be divided into further branches.

3. It is rather easy to analyze economic processes.

4. Partial microeconomic analysis ignores both directly and indirectly induced effects.

5. Indirect effects have a negative impact on microeconomic analysis.

Группа 8.

Задание 1. Перевести письменно текст из учебника Yates со страницы 38-39 (MICROECONOMICS AND MACROECONOMICS).

whether this will continue; to conserve scarce and expensive oil; on mastering the tools of the trade; it (model) deduces hoe people will behave; to concentrate on essentials; to work out; bridges are likely to be congested; sifting through all the facts; the facts alert us to the need; we regard the close factual relationship; without any logical underpinning; sooner or later; the blend of models and data

Задание 3. Найти слова в тексте и написать их перевод на английский язык.

анализирует вопросы, относящиеся к описанию прошлого; поставит автомобилистов в еще более сложное положение; намеренное упрощение реальности; в час пик; стоять в очереди; особой, ключевой важности (слово); выработать единственную, точно правильную теорию; действительное совпадение; обращение к логическому умозаключению; совпадение, на которое можно не обращать внимания; ложная связь; теория должна проверяться на фактах; оценка того, какие доказательства можно рассматривать как уместные

Задание 4. Соедините слова и рядом напишите перевод слов (1-10).

1. to deliberate 2. to square 3. to deduce 4. relevant 5. underpinning 6. time-series 7. coincidence 8. chart 9. apparent 10. to plot

a. a remarkable occurrence of events or ideas at the same time, suggesting but lacking a causal relationship; b. to determine or mark the location of a point on a graph by means of coordinates; c. to think or consider carefully and fully, especially in order to make a decision; d. supporting structures or foundations; e. readily understood or perceived; f. a group of facts about smth., set up in the form of a diagram, table, graph, etc.; g. to infer by logical reasoning; h. a set of variables with value related to the respective times the variables are measured; i. relating to a matter in hand; j. to bring into agreement; k. absolutely necessary;

Задание 5. Найдите синонимы. Напишите перевод слов. 1. emphasis 2. deliberate 3. reasoning 4. to assign 5. to accord

a. intentional, prearranged b. proof, affirmation c. stress, accent d. analysis, deduction e. appoint, delegate f. conform, correspond

Группа 9.

Задание 1. Перевести письменно текст из учебника Yates со страницы 44-46 (Index numbers).

Задание 2. Найти слова в тексте и написать их перевод на английский язык.

среднегодовые цены на медь и серебро; определять значение; делить на;

становится сразу очевидным; строить диаграмму цифровых показателей; увеличилась в шесть раз; необычное поведение переменных; проходить незамеченным, временной ряд, структурный анализ

Задание 3. Какие параграфы текста содержат следующую информацию?

A. A weighted average shows how similar are the changes over time of price indices to those of actual prices of metals.

B. The graph might make the difference between data immediately evident.

C. It tends to be more useful to deal with index numbers than to study actual prices.

D. The price index is derived by dividing the prices for a certain metal by the value of the base year and by multiplying it by a hundred.

Задание 4. Вставьте слова в текст.

Multiply, plot, annual average, behavior of variables, calculations, sixfold, apparent, assign the value, interpret,t present, index numbers

To compare prices economists use (1) _______________________. To construct them economists (2)______________________ 100 to price indices of the base year, completing further (3)__________________. Indices, (4)______________ ________________ in a table make immediately (5)_______________________ the price changes, while individual prices cannot be (6)______________________ so quickly. But to make (7)_________________________ even more noticeable we need to (8)_______________ price indices in a figure or a graph.

Задание 5. Выберите правильный ответ.

1.We present the data as index numbers because:

A. index numbers are more reliable comparing to actual prices.

B. indices make results of comparison immediately apparent.

C. price indices of metals are the same in the base year.

D. index numbers can be interpreted very quickly.

2. Diagrams often draw attention to unusual behavior of the variables

A. as they are more precise.

B. while in a table it might pass unnoticed.

C. because they don’t focus on the long rows of numbers.

D. as rises and falls are more evident in the graphs.

E. which are presented in the tables much more scrupulously.

F.because even insignificant changes in the graph movement can be identified.

Группа 10.

Задание 1. Перевести письменно текст из учебника Yates со страницы 53-55 (Economic models).

controversy over the policy; extra revenue; to run the tube and bus services; to organize one‘s thinking; picks out the most important elements; in this stark form; directly controls the fare; it might be argued; is completely unresponsive to changes in fares; an economist would initially adopt; we must not view the number of passengers as fixed; other things equal; a bare-bones model; in an effort to simplify

Задание 3. Найти слова в тексте и написать их перевод на английский язык.

приводить к сокрушительным потерям; вопрос был направлен в суд; построить модель; упрощенная картина реального мира; устанавливать цены; влиять на количество пассажиров; не принимать во внимание; плата за проезд на альтернативных видах транспорта; если цены остаются неизменными; экономист выбрал бы первоначально; плата за проезд важна сама по себе; назвать четко, ясно; стимулировать пассажиров метро; при условии, что погодные условия остаются неизменными весь год; прогнозировать доход; получать от продажи; реальная прибыль; более высокая плата за парковку машин; привести к серьезным ошибкам

Задание 4. Соедините слова и напишите рядом перевод слов (1-5)

1. equation 2. equality 3. notation 4. to scatter 5. to reproduce

a. a short expression given in the written form; b. spread over a wide area or a long period of time; c. the situation when smth. obtain the same advantages; d. to make smth. happen in the same way it happened before; e. statement in mathematics that shows that two totals or amount are equal;

Задание 5. Выберите один правильный ответ

1) “Fares Fair “policy of cutting bus and tube fares

A. would increase passengers and bring extra revenue.

B. would lead to disastrous losses in running London Transport.

C. would be efficient if other factors don’t change.

2) A simplified model of reality

A. takes into consideration only the bus and tube fares.

B. should be viewed as a function of different modes of transport, petrol prices and other factors.

C. should not neglect such factors as passengers’ habits, tradition, weather conditions, etc.

Группа 11.

Задание 1. Перевести письменно текст из учебника Yates со страницы 60-62 (Scatter diagrams).

examines the relations; is not sufficient to compensate; to capture the average relations; we can infer; commuters abandoned their cars; to forecast revenue raised from; to omit the most important determinants

Задание 3. Вставьте слова

predict, model, theory, goal, economic, full detail, to develop, reality, yields. economics, enables, to predict, complex, simplify, describe, gas, useful, prediction, goods, provides

Economic Models and Theories

Economists measure and 1)______ the material side of life, but their main 2)______ is to understand how economies operate. In 3)______, as in other fields, understanding is valuable because it 4)______ us to use logic to answer ‗what if‘ questions.

For instance, if you understand how a car operates you can 5)______ what will happen to any car if it runs out of gas. To make such a 6)______ you apply basic logic to a simple description or 7)______ of automobile operation. The simpler the model the easier it is to use it to give general answers to ‗what if‘ questions but the less 8)______ the predictions it 9)______. Thus, the simplest 10)______ of auto operation would predict only that any car‘s engine will stop if it runs out of 11)______, while a more complex model might enable you 12)______ how far a particular car would move, depending on the road and its speed, when the gas ran out.

Real economies are too 13)______ to think about logically in 14)______, there are too many different 15)______, services, firms, workers and consumers to keep track of. In order 16)______ understandable descriptions of reality, we must 17)______ drastically. But it then follows that all economic theories are wrong - since they leave out some aspects of 18)______. Does it 19)______ generally correct answers to questions of interest? Another way to put this is that the predictions of 20)______ models should be consistent with the available evidence.

Задание 4. Найдите синонимы. Напишите рядом их перевод

1. sensitive 2. capture 3. ignore 4. conclusive 5. determinant

a. apprehend b. neglect c. decisive d. resolving factor e. responsive

Задание 5. Какой параграф из текста содержит данную информацию?

A. We examine the different from the table way of presenting relations between fares and revenues.

B. Studying this table makes the comparison between real revenue and real tube fares clear.

C. The idea about the direct influence of tube fares on revenues is not conclusive.

D. By multiplying the real fare by the number of passenger kilometers we get the real tube revenue.

Группа 12.

Задание 1. Перевести письменно текст из учебника Yates со страницы 63-66.

we define the market, a set of arrangements, to bring together the buyer and the seller, to operate through intermediaries, to transact business, to stock the shelves, to bid against each other, superficially different, to guide resource allocation, to purchase at each conceivable price, to become lucrative, distinction

Задание 3. Найти слова в тексте и написать их перевод на английский язык.

цены служат ориентиром для распределения ресурсов, фондовая биржа, от имени клиента, устанавливать цену, гарантировать, сосредоточиться на основных характеристиках, изучить взаимодействие этих сил, поведение покупателя и продавца, назначать цену, диапазон цен, ограниченное количество шоколада будет востребовано, при прочих равных, стимул поставлять товар, быть боле точным, как цена корректируется (регулируется), чтобы сбалансировать объем спроса и предложения, стремиться увеличить поставки

Задание 4. Верно или неверно?

1. A typical market model is required to study demand and supply interaction.

2. Economic functions of different markets are distinct.

3. At auctions intermediaries bid against each other on behalf of buyers.

4. Ford’s output exceeds Rolls Royce’s one.

5. There is no way to supply without benefit.

Задание 5. Найдите антонимы. Напишите рядом перевод слов.

1. exceed 2. essential 3. adjust 4. decay 5. frustrated

a) disarrange b) happy c) less than a number or amount d) unimportant e) fusion

Группа 13.

Задание 1. Перевести письменно текст из учебника Yates со страницы 70-72.

equilibrium price, to approach the problem diagrammatically, the horizontal axis, to plot the point, to obtain the demand curve, to re-examine the analysis of excess supply, voluntary participation, to involve buyers in forced purchases, to reconsider price determination, to bid up the price, to eliminate excess demand

Задание 3. Соедините слова и напишите перевод слов 1-13

1. market

2. feature

3. each conceivable price

4. to charge

5. supply

6. demand

7. the quantity supplied

8. the quantity demanded

9. econometrics

10. a surplus

11. intersection

12. a shortage

13. the market equilibrium price

a) a distinct property or piece

b) to ask someone to pay an amount of money for something that you are selling to them or doing for them

c) maximum quantity of a good that sellers are willing to supply at a given price (over a fixed period of time)

d) the quantity demanded equals the quantity supplied at that price

e) any place where the sellers of a particular good or service can meet with the buyers of that goods and service where there is a potential for a transaction to take place

f) the amount of any commodity actually produced and available for purchase

g) each and every possible price

h) a point or line common to lines or surfaces that intersect

i) the branch of statistical theory concerned with the analysis of economic phenomena, in particular the application of statistical methods to economic data.

j) the quantity of a good or service that people want to buy

k) maximum quantity of good that buyers are willing to buy at a given price (over a fixed period of time)

l) occurs if the price is below the market equilibrium price

m) occurs if the price is above the market equilibrium price

Задание 4.Найдите синонимы и напишите их перевод

1. lucrative 2. increasingly 3. technical advances 4. to imply 5. to purchase

a) more and more over a period of time b) bringing a lot of money c) infer d) to buy e) progress in science, technology

Задание 5.Верно или неверно?

1. Table 3 – 1 enables us to define the equilibrium price.

2. The demand curve slopes downward.

3. The intersection of the curves DD and SS show market equilibrium.

4. The equilibrium position is shown by the point A.

ДЛЯ ВСЕХ ГРУПП

Задание. Необходимо прочитать текст и уметь его переводить. Каждому достанется свой фрагмент текста.

1.Many people think that economics is about money. Well, tosome extent this is true. Economics has a lot to do with money: with how much money people are paid; how much they spend; what it costs to buy various items; how much money firms earn; how much money there is in total in the economy. But despite the large number of areas in which our lives are concerned with money, economics is more

than just the study of money. It is concerned with the following:

• The production of goods and services: how much the economy produces, both in total and of individual items; how much each firm or person produces; what techniques of production are used; how many people are employed.

• The consumption of goods and services: how much the population as a whole spends (and how much it saves); what the pattern of consumption is in the economy; how much people buy of particular items; what particular individuals choose to buy; how people’s consumption is affected by prices, advertising, fashion and other factors.

2. But we still have not quite got to the bottom of what economics is about. What is the crucial ingredient that makes a problem an economic one? The answer is that there is one central problem faced by all individuals and all societies. From this one problem stem all the other economic problems we shall be looking at throughout this book. This central economic problem is the problem of scarcity.

This applies not only in countries like Ethiopia and the Sudan, but also in the UK, the USA, Japan, France and all other countries of the world. For an economist, scarcity has a very specific definition. Scarcity The excess of human wants over what can actually be produced to fulfil these wants.

3. Ask people if they would like more money, and the vast majority would answer ‘Yes’. They want more money so that they can buy more goods and services; and this applies not only to poor people but also to most wealthy people

too. The point is that human wants are virtually unlimited. Yet the means of fulfilling human wants are limited. At any one time the world can only produce a limited amount of goods and services. This is because the world only has a limited amount of resources. These resources, or factors of production as they are often called, are of three broad types:

• Human resources: labour. The labour force is limited both in number and in skills.

• Natural resources: land and raw materials. The world’s land area is limited, as are its raw materials.

4. • Manufactured resources: capital. Capital consists of all those inputs that have each had to be produced in the first place. The world has a limited stock of capital: a limited supply of factories, machines, transportation and other equipment. The productivity of capital is limited by the state of technology. So here is the reason for scarcity: human wants are virtually unlimited, whereas the resources available to satisfy these wants are limited. Of course, we do not all face the problem of scarcity to the same degree. A poor person unable to afford enough to eat or a decent place to live will hardly see it as a ‘problem’ that a rich person cannot afford a second BMW. But economists do not claim that we all face an equal problem of scarcity. In fact this is one of the major issues economists study: how resources are distributed, whether between different individuals, different regions of a country or different countries of the world.

5. We said that economics is concerned with consumption and production. Another way of looking at this is in terms of demand and supply. In fact, demand and supply and the relationship between them lie at the very centre of economics.

But what do we mean by the terms, and what is their relationship with the problem of scarcity? Demand is related to wants. If goods and services were free, people would simply demand whatever they wanted. Such wants are virtually boundless: perhaps only limited by people’s imagination. Supply, on the other hand, is limited.

It is related to resources. The amount that firms can supply depends on the resources and technology available. Given the problem of scarcity, given that human wants exceed what can actually be produced, potential demands will exceed potential supplies. Society therefore has to find some way of dealing with this problem. Somehow it has got to try to match demand with supply. This applies at the level of the economy overall: aggregate demand will need to be balanced against aggregate supply. In other words, total spending in the economy should balance total production.

6. It also applies at the level of individual goods and services. The demand and supply of cabbages should balance, and so should the demand and supply of DVD recorders, cars, houses and package holidays. But if potential demand exceeds potential supply, how are actual demand and supply to be made equal? Either demand has to be curtailed, or supply has to be increased, or a combination of the two. Economics studies this process. It studies how demand adjusts to available supplies, and how supply adjusts to consumer demands. Economics is traditionally divided into two main branches – macroeconomics and microeconomics, where ‘macro’ means big, and ‘micro’ means small. Macroeconomics is concerned with the economy as a whole. It is thus concerned with aggregate demand and aggregate supply. By ‘aggregate demand’ we mean the total amount of spending in the economy, whether by consumers, by customers outside the country for our exports, by the government, or by firms when they buy capital equipment or stock up on raw materials. By ‘aggregate supply’ we mean the total national output of goods and services. Microeconomics is concerned with the individual parts of the economy. It is concerned with the demand and supply of particular goods and services and resources: cars, butter, clothes and haircuts; electricians, secretaries, blast furnaces, computers and oil.

7. All societies are faced with the problem of scarcity. They differ considerably, however, in the way they tackle the problem. One important difference between societies is in the degree of government control of the economy. At the one extreme lies the completely planned or command economy, where all the economic decisions are taken by the government. At the other extreme lies the completely free-market economy. In this type of economy there is no government intervention at all. All decisions are taken by individuals and firms. Households decide how much labour and other factors to supply, and what goods to consume. Firms decide what goods to produce and what factors to employ. The

pattern of production and consumption that results depends on the interactions of all these individual demand and supply decisions. In practice, all economies are a mixture of the two. It is therefore the degree of government intervention that distinguishes different economic systems. Thus in the former communist countries of eastern Europe, the government played a large role, whereas in the USA, the government plays a much smaller role.

Задание. Выучите слова к диктанту

1. Production – производство

2. Consumption – потребление

3. Factors of production – факторы производства

4. Scarcity – недостаток, редкость

5. Labour – труд

6. Macroeconomics – макроэкономика

7. Aggregate demand – совокупный спрос

8. Aggregate supply – совокупное предложение

9. Microeconomics – микроэкономика

10. to encourage – поощрять

11. to impose taxes – облагать налогами