UNIT 2 The Science of Economics

Date: 2015-10-07; view: 441.

Essential Vocabulary

1. sum-total сукупність

2. undertake виконувати, починати, братися Syn. do

3. commodity предмет споживання, товар, продукт

4. essential commodities товари першої необхідності

5. non-essential commodities товари не першої необхідності

The science of economics is based upon the facts of our everyday lives. Economists study our everyday lives and the general life of our communities in order to understand the whole economic system of which we are part. They try to describe the facts of the economy in which we live, and to explain how it works. The economist's methods should of course be strictly objective and scientific.

We need food, clothes and shelter. We probably would not go to work if we could satisfy these basic needs without working. But even when we have satisfied such basic needs, we may still want other things. Our lives might be more enjoyable if we had such things as radios, books and toys for children. Human beings certainly have a wide and very complex range of wants. The science of economics is concerned with all our material needs: it is concerned with the desire to have a radio as well as the basic necessity of having enough food to eat.

Thus economicsis a social science concerned with the production, distribution, exchange, and consumption of goods and services. Economists focus on the way in which individuals, groups, business enterprises, and governments seek to achieve efficiently any economic objective they select.

Standard economics can be divided into two major fields. The first, price theory or microeconomics, explains how the interplay of supply and demand in competitive markets creates a multitude of individual prices, wage rates, profit margins, and rental changes. The second field, macroeconomics, deals with modern explanations of national income and employment.

Exercise 1.Answer the following questions.

a. What is economics?

b. What is it based upon?

c. What do economists try to do?

d. What do they try to explain?

e. What should the methods of the economics be like?

f. What three essential things do we need?

g. What would happen if we could get these essentials without working?

h. What might make our life more enjoyable?

i. What is economics as a social science concerned with?

j. What do the economists focus on?

k. What two fields can standard economics be divided in?

l. What is macroeconomics?

m. What is microeconomics?