Ex 5. Answer the questions and do the assignments

1. What are the three basic problems of daily living every group of people must solve?

2. What does Economics study? Why is it placed within the social sciences?

3. What is meant by goods? By services?

4. Comment on the central economic problem for society.

5. In what way is Economics connected with human behaviour?

6. Whose interaction constitutes economic activity? Expand on their roles.

7. What is the volume of commodities to be produced and purchased limited by? What consequences does this fact involve?

8. What stands for the notion “rational decisions”?

Ex 6. Find in the text the words and phrases that mean:

1. the part of human behavior which relates to the production, exchange and use of goods and services;

2. the production of goods and services for the satisfaction of the needs and wants of consumers;

3. a regulator, supervisor and promoter of economic activities;

4. three types of economic agents;

5. factors influencing economic decision-making.

microeconomics, macroeconomics, household budget, positive economics, normative economics

Text B

What are Microeconomics and Macroeconomics?

Economists talk about microeconomics and macroeconomics. Microeconomics deals with people, like you and me, and private businesses. It looks at the economic decisions people make every day. It examines how families manage their household budgets. Microeconomics also deals with companies - small or large – and how they run their business. Macroeconomics, on the other hand, looks at the economy of a country - and of the whole world. Any economist will tell you, though, that microeconomics and macroeconomics are closely related. All of our daily microeconomic decisions have an effect on the wider world around us.

Another way to look at the science of economics is to ask, ‘what’s it good for?’ Economists don’t all agree on the answer to this question. Some practice positive economics. They study economic data and try to explain the behavior of the economy. They also try to guess economic changes before they happen. Others practice normative economics. They suggest how to improve the economy. Positive economists say, ‘this is how it is’. Normative economists say, ‘we should … ’

So what do economists do? Mainly, they do three things: collect data, create economic models and formulate theories. Data collection can include facts and figures about almost anything, from birth rates to coffee production. Economic models show relationships between these different data. For example, the relationship between the money people earn and unemployment. From this information, economists try to make theories which explain why the economy works the way it does.