Part 1. The Economy.
Read the text and translate it:
The word "the economy" is a word we hear or read almost every day. For example, we may be told that "the world economy is in the doldrums", or "the European economy is making little progress out of recession", or "the UK economy is beginning to recover", or "the Scottish economy has held up relatively well during the recent recession".
But what is meant by the economy? What is an economy? What happens in one? How does an economy work?
The economy is a social mechanism which answers these three questions. The economy means a system for the management, use and control of the money, goods and other resources of a country, community or household.
The basic economic questions of what, how, and for whom to produce are answered in different ways. Consider, for example, how the for-whom (distribution of income) question might be answered. Suppose your economic professor announced on the first class day that the publisher of your textbook had provided the class with 10 free textbooks as part of its book promotion campaign. If there are 40 students in the class, your professor must decide how to distribute the 10 scarce textbooks. How is the professor to decide?
There are several ways to distribute this windfall. The professor could toss the textbooks "up for grabs". Those who move fastest, catch best, sit near the front, or have the longest arms would win. The first 10 students in the door could be rewarded for promptness with free textbooks; or lottery tickets could be given out, with students holding winning numbers receiving free textbooks.
The professor might prefer to indulge a preference for redheads, left-handed students, or foreign students. Perhaps a "needs" test could be used, with textbooks given free to the lowest-income students. Or the professor could auction the books off to the highest bidders. A noble professor might then distribute the revenues equally among all students, so that all students in the class would, in effect, have their book purchases subsidized. A less noble professor (or perhaps a needy one) would keep the money. The for-whom question, as well as the what and how questions, can be answered in a variety of ways in different societies around the world.
Vocabulary
to be in the doldrums – in a state of inactivity
recession – a period of reduced trade and business activity
to recover – to return to good health and strong conditions
to hold up well – to stay or keep smth in a good state
to happen (to) smb – to come to an existence without being planned
management – an act of being in control of business affairs, money, etc
resource – any of the possessions or qualities of a person, an organization, a country
natural human / labour capital scarce productive |
resources
|
community – the public, people in general
to announce – to make known publicly
promotion campaign – an activity intended to help the development or success of a product for sale
windfall – unexpected lucky gift or gain, esp. money
to distribute – to divide and give out among people, spread out through an area
to indulge a preference – to do a favour
revenue – income
Exercise 1. Give the Russian equivalents:
Relatively, household, to provide, to toss smth up for grabs, to reward for, redheads, left-handed, to auction smth off, a bidder, to subsidize.
Exercise 2. Translate the following words and expressions into English:
Нуждающийся, проворность, редкий, предпочитать, покупка, студенты с низким достатком, дать бесплатно, использование, подразумевать, начало, предположим.
Exercise 3. Read these words paying attention to articles:
the economy
the UK economy
the Russian economy
the Chinese economy
the French economy
the European economy
the world economy
an economy, economic
Exercise 4. Practice saying the words of the same root, translate and learn them:
economy – economic – economics – economical – to economize – economist; scarce – scarcity; to distribute – distribution; to manage – manager – management; to promote – promotion; to prefer – preference; to be busy – business – businessman; to announce – announcement; to recover – recovery; to provide - provision.
Exercise 5. Insert the necessary word in a gap.
recession, to provide, promotion, revenue, community, in the doldrums, natural resource, to subsidize, the need, to recover, to reward, capital, distribution.
This terrorist attack has been condemned by the entire international ______ .
A company's ______ assets are its machines, buildings, and other property.
Oil is Kuwait's most important _____________ .
The company hopes _________ the cost of developing this product within about two years.
This year's sales _________ haven't been very successful.
The hotel ________ a shoe-cleaning service for its residents.
We take money from the bank as _______ arises.
They ______ the boy with 5 pounds for bringing back the lost dog.
The newspaper is having _________ problems, and in some parts of the country people are unable to buy it.
The motor trade is really ________ .
The government is short of money because of falling oil _______ .
The local authority _______ the transport service.
A _______ means less spending, fewer jobs and a decline in the prosperity of the nation.
Part 2. The Economics.
Read the text and translate it:
Economics is a social science studying economy. Like the natural sciences and other social sciences, economics attempts to find laws or principles by building models, the predictions of the models from the basis of economic theories. Then the predictions of the models are compared with the facts of the real world.
The basic postulate of economics refers to the fact that resources do not survive in satisfying feeling of man’s needs and desires, that is to say that the means of satisfying his needs are scarce. Therefore economics is commonly defined as the study of the allocation of scarce resources among unlimited and competing uses. This definition explains the methodological approach of the economists: as resources are scarce, the partial satisfaction of one need means renouncing the partial satisfaction of another need. Man is forced to choose between opportunities. The economists assume that he will do so according to the economic principle. Man maximizes utility subject to the limitations of resources. The price of choosing one opportunity may be falser than that of the best opportunity not chosen. Consequently, the economist defines the costs and value of a good or an activity as the renunciation of that benefit of the best non-chosen opportunity which is connected with his choice of that good or the implementation of that activity. This renunciation is referred to as opportunity costs. The phenomenon of scarcity results in a fact that nature does not provide goods in a desired quantity and quality as well as for man not living in isolation, but in community with other human beings. From the first aspect follows the problem of production, that is the transformation of natural resources into the quantity and quality of goods desired. From the second aspect follows the problem of distribution that is the allocation of goods and resources to be in requisition by individuals. As not everybody can have all his wishes, all societies require institutions and co-ordination mechanisms to regulate production and distribution and to co-ordinate the activities of the human beings. There’s a multitude of such institutions and co-ordination mechanisms: institutions such as family, church, business firms, state, co-ordination mechanisms such as market, election, bargaining and bureaucracy.
The problem of choosing opportunities, of the existence of opportunity costs, of production and distribution as well as of functioning institutions and co-ordination mechanisms can be analysed by the economist under varying aspects. He may ask how something ought to be and he may investigate how and why something really is. In the first case this is the branch of normative economics, he is looking for the best choice among opportunities, the best possible production, the just distribution or the best economic system. In the second case this is the branch of positive economics, he tries to find out what choices are really made, how production and distribution are really done or how economic systems function in reality.