Comments

1. ... what economics is all about — що складає економiку

2. to be concerned with — мати справу із; займатися

3. the effects of government spending — ефективнiсть урядових витрат

4. ... unlimited and competing wants — необмеженi потреби, що пос­тійно зростають

5. to make up one’s own mind — вирiшувати самому

6. to gain a living — заробляти на життя

8. Factors of production

The reason people cannot satisfy all their wants and needs is the scarcity of productive resources. These resources or factors of production are called land, labour, capital, and organization or entrepreneurship.

As an economic term land means the gifts of nature or natural resources not created by human efforts. They are the things provided by nature that go into the creation of goods and services. Land has a broad meaning. It is not only land itself, but also what lies under the land (like coal and gold), what grows naturally on top of the land (like forests and wild animals), what is around the land in the seas and oceans and under the seas and oceans.

The second factor of production is labour — people with all their efforts and abilities. Unlike land, labour is a resource that may vary in size over time. Labour is the human input into the production process.

The third factor of production is capital — the tools, equipment and factories used in production of goods and services. It is a produced factor of production, a durable input which is itself an output of the economy.

Entrepreneurship, the managerial or organizational skills needed by most firms to produce goods and services, is the fourth factor of production.

1. wants and needs — бажання та потреби

2. factors of production — фактори виробництва

3. entrepreneurship — підприємництво

4. gifts of nature — дари природи

5. dramatic impact — вирiшальний вплив

6. wages — заробітна плата

7. income — дохід, прибуток

8. primary factor of production — первинний фактор виробництва

9. Economic systems

There are 3 major kinds of economic systems: traditional, command and market.

In economic with traditional economy nearly all economic activity is the result of ritual and custom. The main advantage – is that everyone has a role in it. This helps keep economic life stable.

A command economy – one where a central authority makes most of the What, How and for Whom decisions. Economic decisions are made at the top and people are expected to go along with choices made by their leaders. It means that major economic choices are made by the government.

In a market economy the questions of What, How, and for Whom to produce are made by individuals and firms is an arrangement that allows buyers and sellers to come together to conduct transaction. A market economy has several major advantages. First, a market economy is flexible and can adjust to change over time. The 2- is the freedom that exists for everyone involved: 3 – incredible variety of goods and services available to consumers.