1. Why study economics?

Your economic knowledge helps in managing your personal lives. Your food, home, clothes and even your leisure time are affected in part by economic forces. The study of economics will help you to understand these forces better and to live a fuller life. For example learning about the stock market may help people to manage their finances. The lawyer, the investor, the farmer – all need to know about their business. Governments must constantly make vital decisions that involve economics: how to promote growth(сприяти росту), avoid depression and inflation, etc. Economics will also help to fulfill(виконувати) your responsibilities(обовязки) as a citizen. The central problem of economics is to determine the most efficient ways to allocate(росподіляти) resources. This means that decisions must be made about how the factors of production will be used to produce goods and services which people need.

2. The science of Economics

Economics is the social science of production, distribution and consumption goods and services. Every person has needs and wants. Things which are necessary for survival are called needs. Things which are not necessary for survival but which add comfort and pleasure to our lives are called wants.The work people do is called economic activity. All economic activities taken together make up the economic system.The recourses of a society are known as its factors of production and include land, labour, capital, and entrepreneurs.(підприємці)

The dollar value of all final goods and services produced by an economy over a given period of time is known as the gross domestic product. Economic forces affecting business include the profit motive(користь)Supply is the ability of producers to provide goods and services to individuals at varies prices. Demand is desire by individuals to consume goods and services at varies prices.The science of economic is based upon the facts of our everyday life.

Economics is the study of how people make choices about their resources to satisfy their wants and needs.

3. Microeconomics and macroeconomics

Economics is the study of how people make choices about their resources to satisfy their wants and needs. Economics analysis is divided into two main branches: MICROECONOMICS AND MACROECONOMICS. MICROECONOMICS is the study of individual consumers and business firms, MACROECONOMICS is the study of the economy in whole. MACROECONOMICS examines(роздивляэться) such questions as: how fast is the level of production in the society changing, how fast are prices rising, how many people are unemployment. Thus whereas MICROECONOMICS is the study of the individual pieces of the economic puzzle, MACROECONOMICS puts all this pieces together to focus on the big picture.

Microeconomics is the study of individual consumers and the business firm. Microeconomics deals(працює) with the decisions made by individuals in determining(у визначенні) how to get income(прибуток) and how to spend it. With regard to business firms( що стосується комерційних фірм) microeconomics determines, first, how to use inputs(ресурси) in the production of output(вироби), and, second, how much output to produce.

Macroeconomics is a branch of economics dealing with the performance , structure , behavior , and decision – making of the whole economy. Macroeconomics study aggregated indicators(агрегатних показників) such as GDP , unemployment rates and price indices(індекси) to understand how the whole economy functions. Macroeconomics develop models that explain the relationship between such factor as national income , output(вироблена продукція), consumptions, saving(економія), investment, international trade(міжнародна торгівля) and international finance.