LESSON 1

Text A

What is Economics

Many of the world's most pressing problems are economic in nature. So knowledge of basic economics is essential to anyone who wants to understand the world in which we live.

The subject matter of economics is society itself. But economics is concerned with studying those aspects of human society which are to do with the production and consumption of goods and services; wages and earnings; unemployment; inflation; government spending, taxation and regulation; international trade, and the distribution of material wealth in the country and throughout the world.

All economic questions arise from the fundamental fact of scarcity. Nature does not provide all of the things the society wants. We must decide what, how and for whom to produce. To reduce scarcity human beings can apply their labour to manipulate nature, e.g. cultivating crops. If human beings succeed in their efforts, they become better off in terms of material wealth. This steady improvement is called economic growth.

The ability of producers to provide goods and services to individuals at various prices is broadly covered by the concept of supply. The desire by individuals to consume goods and services at various prices is broadly covered by the concept of demand. For each commodity produced in the economy the interaction between supply and demand leads to the determination of the price and the quantity of output that is produced or sold. Virtually, all areas of study in economics can be classified into those under the heading of supply, those under the heading of demand and those based on interrelationships between supply and demand.

There are two sides to the study of economics - microeconomics and macroeconomics. Microeconomics is concerned with individual products and decisions made by individual firms and consumers. Macroeconomics is concerned with the functioning of the overall economy.

Microeconomics is divided into several categories of decision­making. With regard to the actions of consumers, microeconomics is

4

first concerned with the choices individuals make in determining how to spend their income. Second, microeconomics deals with how individuals decide on the quantity of the labour or other resource endowments, such as capital, or land, that they wish to sell to firm in exchange for income.

With regard to the actions taken by firms, microeconomics is first concerned with how inputs should be used in the production of output. Second, based on production costs and the prices at which their goods will be sold in the market, firms must decide how much output to produce.

Finally, "combining the actions of individuals and firms, microeconomics is concerned with the determination of prices for both the inputs used in the production process and the outputs produced.

Macroeconomics is concerned with the problems of economic growth, unemployment and inflation. Each of these factors is an indication of the overall state of the economy and how fully resources are utilized. Higher economic growth generally implies higher living standards. Lower unemployment suggests that society is making good use of its labour resource. Low rates of inflation reflect stable valuations of goods and services in terms of money.

So, the major distinction between micro- and macroeconomics analysis is in the groups that are the focus of study in each branch. In microeconomics, individuals and firms are the main agents whose actions are analyzed. In macroeconomics, the actions of broad groupings such as all consumers, government, and all investors - form the basis for analysis.

Notes:

1. the inputs used in the production process and the outputs produced - виробнич1 затрата, що були використаш гпд час виробничого процесу, i вироблена продукта

2. low rates of inflation - низыа piBHi шфляци

Vocabulary

economics	•A	економгка
economy	°A	господарство
production		виробництво
consumption	xft	споживання
wage		заробкна плата
to consume	•A	споживати
earnings		прибуток
unemployment	•A	безробптя
inflation	•A	шфлящя
taxation	'A	оподаткування
distribution	«А	розподш
wealth		багатство, добробут
scarcity	-A	нестача
to reduce	'A	зменшувати
to apply	•A	застосовувати
labour	•A	праця
efforts	•A	зусилля
economic growth	"A	екожлшчне зростання
price	•A	шна
supply	"A	постачання
demand	-A	попит
commodity		товар
output	•A	випуск(продукцп)
microeconomics	-A	мкроекономка
macroeconomics	•A	макроекономка
choice	-A	Bn6ip
income	*A	прибуток
quantity		ЮЛЬЮСТЬ
resource endowments	•A	вкладання ресурс i в
exchange	°A	обмш
production costs	°A	в проб ни квитрати
rate	-A	темп, р1вень, курс
valuation	"A	оцшка
input	•A	ресурси, що були
		використан! у
		виробництв!

Exercises

Ex. 1, Find the following words and phrases in the text. Translate the sentences containing them into your mother tongue.

Pressing problems; the production and consumption of goods and services; scarcity; to apply one's labour; economic growth; to provide goods and services; to consume goods; commodity; decisions; the overall economy; to spend one's income; in exchange for income; inputs; production costs; the determination of prices; inflation; living standards; unemployment; low rates of inflation.

Ex. 2. Match the words in column one with their synonyms in

column two:

to reduce to use, to utilize

choice merchandise, article of commerce

income insufficiency, lack

commodity selection, option

effort amount, number

quantity attempt, endeavour

scarcity earnings, revenue

to apply to shorten, to decrease

Ex. 3. Translate the following sentences paying a special attention to economic terms in bold type with different word-building elements:

1. Investors watch the rate of economic growth closely.

2. That car burns so much gasoline that it is not economical.

3. Economics is at the center of most governmental concerns.

4. She is an economist who works for the government.

5. He lost his job, so he has to economize by not buying expensive things.

6. The national economy is strong now.

7. He economized by using buses instead of taking taxis.

8. In the long run it is an economy to buy good quality goods.

9. She sold her house at an economic price.

10. She cooks very economically.

Ex. 4. Fill in the blanks with prepositions where necessary.

Choice

Let us return ... our own planet as we know it. Faced .. scarcity, people must make choices. When we cannot have everything that we want, we have to choose ... the available alternatives. ... scarcity forces us to choose, economics is sometimes called the science ... choice - the science that explains the choices that people make and predicts how changes ... circumstances affect... their choices.

To make a choice, we balance the benefits ... having more ... some things against the costs of having less ... something else. Balancing benefit against cost and doing the best .. the limits ... what is possible is called optimizing. There is another word that has a similar meaning - economizing. Economizing is making the best possible use ... the resources available.

... making choices, we face ... costs. Whatever we choose to do, we could always have chosen to do something else ....

(from «Economics» by M.Parkin, D.Kind)

Ex. 5. Answer the following questions:

1. Why is knowledge of basic economics so essential?

2. What is the subject matter of economics?

3. What does economics study?

4. What is scarcity?

5. What is economic growth?

6. What do we understand by the concept of supply?

7. What is demand?

8. What does the interaction between supply and demand lead to?

9. How can all areas of study in economics be classified?

10. What is microeconomics concerned with?

11. What does macroeconomics deal with?

12. What is the major distinction between micro- and macroeconomics analysis?

Ex. 6. Ask questions to fit these answers:

1. Many of the world's most pressing problems are economic in nature.

2. All economic questions arise from the fundamental fact of scarcity.

3. To reduce scarcity human beings can apply their labour to manipulate nature.

4. Modern treatment of economic problems has been split into microeconomics and macroeconomics.

5. Microeconomics is divided into several categories of decision­making.

6. With regard to the actions of consumers, microeconomics is first concerned with the choices individuals make in determining how to spend their income.

7. With regard to the actions taken by firms, microeconomics is first concerned with how inputs should be used in the production of output.

8. Higher economic growth generally implies higher living standards.

9. Lower unemployment suggests that society is making good use of its labour resource.

10. Low rates of inflation reflect stable valuations of goods and services in terms of money.

Ex. 7. Define or briefly explain the following key terms:

1. economic growth

2. inflation

3. unemployment

4. scarcity

Ex. 8. Retell the text in brief according to such items:

1. demand, supply

2. macroeconomics, microeconomics

Text В

History of Advertising i.

Marketing is more than just „distributing goods from the manufacturer to the final customer. It comprises all the stages between creation of the product and after the market, which follows the /tr - ^c'Oj eventual sale. One of these stages is advertising. The stages are like

links in a chain, and the chain will break if one of these links is weak. 'кЛ' Advertising is therefore as important as every other stage or link, and each depends on the other for success.

The product or service itself, its naming, packaging, pricing and distribution are all refected in advertising, which has been called the ^u,t^uA lifehood of an organization. Without advertising, the products or services cannot flow to the distributors or sellers and to the consumers or users.

A successful national economy depends on advertising promoting sales so that factory production is maintained, people are employed and have spending power, and the money goes round and round. When this process stops there is a recession. Similarly, prosperous countries are those in which advertising does its job. In Third World countries, in Russia and in Ukraine, economies are poor and advertising is minimal, especially when a large proportion of the population are young non-earners.

Advertising belongs to the modern industrial world and to those countries whigh ar^deveiopmg and becoming industrialized. In the past when a shopkeeper had only to show and shout his goods to passers-by, advertising, as we know it today, hardly existed. Early forms of advertising were signs such as the inn sign, the red-and-white " striped barber's wheel, some of which have survived until today.

The "heed for advertising developed with the expansion of population and the growth of towns with their shops and large stores; mass production in factories; roads and railways to convey goods; and popular newspapers in which to advertise. This process developed some two hundred years ago in industrialised countries.

Advertising grew with the development of media, such as the coffee-house newspapers of the seventeen's century. Nineteenth century advertisers still with us today include Beecham, Tever Brothers, Tipton etc.

Thus the modem world depends on advertising- Without it, producers and distributors would be enable to sell, buyers would not know about and continue to remember products and services, and the

modern industrial world collapse. ^h ''"'Л-' &

~ Штх

Ex. 1. Answer the following questions:

1. What is the main stage of advertising?

2. What happens when links in a chain will break?

3. Is advertising really important for success?

4. In what way does advertising affect the distribution of products?

5. What does a successful national economy depend on?

6. When does the recession appear?

7. What countries do we call prosperous?

8. In what countries is advertising minimal?

Ex. 2. Make a plan for the retelling of the text. Ex. 3. Retell the contents of text В in brief.

LESSON 2

Text A

What is Advertising

Much of the marketing strategy is concerned _Vvith communication. Advertising is a specialized form of communication because in order ihC'f'ffi**'

to satisfy the marketing function it has to do more than inform. It has

_x HJiW«fe<, ° заёекишж, , ^Ш1 ,. , .

to persuade people to complete the marketing strategy which is

designed to sell at a profit what the marketing department believes

people are willing to buy. Advertising has to influence choice and

buying decisions. mj^

«This positive task is brought out in another definition which says

that advertising is the means of making known in ord<?^r to sell». A

name like Ford, Guinness or Texaco makes known - it identifies - but

it does no more than, say, the name on a private hou5e. The three

examples above do not even explain what these companies make. In the case of brand names such as Stork, White Horse or Silk Cut, they do not say jthe product is margarine, whisky or cigarettes с respectively. Therefore, advertising takes the communication process

a step¹ further and makes these three companies or three products known in ways which ^wjlj^ell them. It may also be necessary for advertising to distinguish between products, services or companies with the same name, e.g. Tetley (beer or tea), Kellogg (breakfast cereal or business service), or Swan (beer or matches^ _{f j} _

Advertising is paid and controlled by mass' со mm un i с ati on. This means that the organization completely places its messages, exactly as written and formatted, with the medium's advertising department. Thus a primary reason for using advertising, as a communication tool is that control of the message remains with the sender.

Some other advantage of advertising are its selectivity and the advertiser is control of the implct and timing. 4

With advertising, you can reach a very specific audience selection. Advertisements in ^specialized publications can reach their _f readers ^with very little exflosffie to others. Different ideas can be conveyed to different groups, and

efforts can be concentrated in the

most important areas. <

.For any public relations program, certain groups ormMicsже ^ ^ J

more important than others. Reaching them may be imperative, while

лвемчлн «г . «муш i с ■—гГ-

J reaching others may be optional. To be sure of your key publics, you

ganjely'on advertising

^; ' " Although institutional advertising can be effective in getting key

messages to specific audiences, there are some disadvantages.

Cost cJ.timcu?

Paid space is expensive. Ads in multiple media outlets, which are necessary for message penetration, can cost thousands of dollars in the trade press and millions in the consumer press. The most extreme example is the annual Super Bowl football game, during which a 30- second television commercial cost about $900.000.

The high cost of buying space for advertising has J^d many companies to'slnfV more'of their marketing communications budgets to product publicity, direct mail, and telemarketing. Credibility

'А' не

улМ- relations executives are fond of saying «Advertising raises^,

awareness, but publicity published as news stories creates credibility»^⁷ Because they are controlled messages, advertisements are

generally less bejiwable than publicity that appear^n^th^ news

br^aic'ast ne have more crfci

columns or on reports

ews shows. The public perceives that news " dibihty because purportedly objectiv

e

journalists, who are independent of the o^amzation, have evaluated the information on the basis of truth and accuracy, T&uld ; _a major yalue of publicity in the concept that a third party,

the medium, has endbrsedthe information by printing or broadcasting lt. Advertisements have no such third-party endorsement¹ because anyone with enough money can place an advertisement, provided that

it meets the acceptance standards of the medium.

и р^ел-л