What economics is about

In a general way we all know what economics is about. It is concerned with the production, distribution, and use of goods. It deals with the activities of businesses, workers and households that produce and consume output of the country. As Adam Smith said, economics is ‘an inquiry into the nature and causes of the wealth of nations’.

There are several key aspects of economics. First, there are two main branches of economics: microeconomics and macroeconomics. Microeconomics holds a microscope over some portion of the economy - a particular industry and kind of work or geographic area. It examines how consumers choose among jobs, how a business decides what to produce and what production methods to use.

Macroeconomics looks at totals for the economy as a whole: total output and income, the level of employment, the amount of money in circulation, the level of prices. Microeconomics and macroeconomics must be related, since they deal with the same body of experience. The questions which lie at the core of microeconomics, are a necessary foundation for microeconomics as well.

Economics also focuses on the production of goods and on the income generated in the course of production. It deals with goods and the resources needed to produce them. These resources are scarce, and this raises problems of choice for individuals and for the whole economy.

Economics is a special way of thinking that uses simplified models to explore reality. The use of such models to explore reality, to explain and predict economic events is called positive economics. Economics is also a policy science, with important applications to government. Positive economics can clarify policy alternatives, but choice among these alternatives involves what is called normative economics.

Comprehension:

1. What is economics concerned with?

2. What are the two main branches of economics?

3. Why and how are these two branches of economics related?

4. What kind of models are used in economics and what for?

5. In what way do positive and normative economics differ?

   IX. a) Remember the following:

1. Goods товары и услуги (Use of goods)

2. Business

   1. Бизнес, дело, предпринимательство

   2. Сделка, торговая операция

   3. Деловые круги, деловая жизнь, экономическая деятельность.

   4. Компания, предприятие, фирма.

   5. Заказ, объем производства.

   6. Профессия, занятие.

3. Individual

   1. Человек, лицо

   2. Отдельный товаропроизводитель.

   3. Личный, индивидуальный.

2. In what meaning(s) are these words used in the text? Find, read, and translate the sentences with these words.

3. Translate the sentences given below. Pay attention to the word ‘business’:

4. We mean business. 2. Mind your own business. 3.Many businesses in the USA are small firms. 4.What is your business? 5.Business in Russia is stagnating at present. 6.It’s none of your business. 7.Most goods are produced by businesses. 8. I am thinking of starting my own business.

10. Analyze the following text. Answer the questions to different parts of the text.