Ex. 9. Make up sentences from the jumbled words.

1. sense / of /study /begin /wonder /of /should /the /economics /with /the

2. science / economy /economics /studying /a social /is

3. discipline /two /as /hundred /a scholarly /is /old /years /economics

4. work / 10 years/ writing /Adam Smith / to /his /”The Wealth of Nations” /devoted

Text 2

ECONOMICS: THE STUDY OF SCARCITY AND CHOICE

VOCABULARY

to satisfy wants and needs - удовлетворять желания и потребности poverty – бедность shortage – нехватка, дефицит luxury- предмет роскоши to solve the problem – решать проблему standard of living – уровень жизни to increase – повышать goods and services – товары и услуги cause – причина to provide– обеспечивать, давать

machinery– машинное оборудование tools– инструменты manufacture- производство skill – умение risk-taking ability– способность к риску entrepreneur – предприниматель scarcity - нехватка, дефицит advertising company– рекламная кампания opportunity cost – альтернативные издержки, стоимость; “цена выбора” imbalance– несоответствие

Everyone goes through life having to make choices. One of the things that young people discover as they grow older is that you can’t have everything. Although there are a lot of goods on sale you have to limit your choice to one or two. Neither individuals, nor societies can have all the things they would like to have.

Most people in the world cannot afford to buy everything they want because our wants are unlimited. Why are there so many wantsandneedsthat we cannotsatisfy? Why do millions of people live inpoverty in many countries around the world? Most people will answer these questions by saying, “Because there is not enough money”.

Is this the real ECONOMIC PROBLEM – shortageof money? An example may help to show you why more money isnotthe answer to the problems of being unable to satisfy all people’s wants and needs.

The government of a small country is worried about the large numbers of people who cannot afford enough of the basic needs of life. Even those citizens with more money are always complaining that the country is not producing enough of the luxuriesthat they want to buy. The government decides to print more bank notes and to double all of the incomes of everybody in the country.

Has the government solvedthe economicproblemof the country? Are there now more goods for the people to buy? Are there more houses for them to live in? Will thestandard oflivingof the populationincrease?

The answer to all these questions is “No”. Printing more money does not produce more goods and servicesor satisfy more wants or needs, because prices will rise. What is the point of having more money to spend, if the prices of everything you want to buy have gone up by the same amount?

The real cause of the economic problem

The real cause of the shortage of goods and services in a country is not having too little money. It is too few FACTORS OF PRODUCTION (also called resources of production). There are four factors of production.

LandThis term is used to cover all the natural resourcesprovidedby nature and includes fields and forests, oil, gas, metals and other mineral resources.

Labour This is the physical and mental efforts of people needed to make products.

CapitalThis is the finance, factories,machineryandtoolsneeded for themanufactureof goods.

EnterpriseThis is theskillandrisk-taking abilityof the person who brings the other resources together to produce a good or service. For example, the owner of a business. These people are calledentrepreneurs

In any one country, and in the world as a whole, these factors of production are limited in supply.As there is never enough land, labour, capital or enterprise to produce all of the needs and satisfy unlimited wants of a whole population, there is an economic problem ofscarcity.

Text 3