Unit 1. What does economics study?

Pre-reading tasks:

Vocabulary.

1. Read the definitions of the following economic concepts, learn them and be ready to use.

Production – the process of the transforming resources into goods available for human wants.

Consumption  the act of using goods and services to satisfy wants. This will normally involve purchasing the goods and services.

Factors of production (or resources) – the inputs into the production of goods and services: labour, land and raw materials, capital.

Labour – all forms of human input, both physical and mental, into current production.

Land and raw materials – inputs into production that are provided by nature: e.g. unimproved land and mineral deposits in the ground.

Capital – funds that support a business as well as the tools, such as machines, vehicles, buildings – that are combined with labour and land to produce goods and services.

Scarcity – the excess of human wants over what can actually be produced to fulfill these wants.

Macroeconomics – the branch of economics that studies economic aggregates (grand totals): e.g. the overall level of prices, output and employment in the economy.

Microeconomics – the branch of economics that studies individual units: e.g. households, firms and industries. It studies interrelationship between these units and determining the pattern of production and distribution of goods and services.

Aggregate demand – the total level of spending in the economy.

Aggregate supply – the total amount of output in the economy.

2. Match English and Ukrainian equivalents.

as a whole	спільна пропозиція
production and consumption	спільний попит
transformation of inputs into outputs	природні ресурси
item	часто приходиться мати справу з...
human wants	виробництво і споживання
advertising	обмежена кількість ресурсів
to satisfy wants	у цілому
purchase	товари й послуги
at any one time	людські потреби
economic realities	задовольняти потреби
goods and services	перетворення вкладених коштів у кінцевий продукт
limited amount of resources	купівля (дія), покупка (придбана річ)
human resources	у певний період часу, одночасно, разом
in total	увесь, який (що) розглядається в цілому
natural resources	економічні реалії
manufactured resources	витрати і заощадження
aggregate demand	людські ресурси
aggregate supply	виробничі ресурси
spends and saves	вироб, одиниця товару
has a lot to do with…	реклама
WARMING UP.

• What do you know about economics?

• Is it a science? If yes, what does it study?

• What is money for you? What do you know about money?

• What can you say about macroeconomics and microeconomics? Pay attention to these words: macro- and micro- .

• Of course, you’ve heard the words “demand” and “supply”. What are their roles in production? Do they influence production? In what way?

Read the text, try to understand it and be ready to render it.