Macroeconomics and microeconomics

THE ECONOMY

economy - господарство; економіка factors of production - чинники виробництва opportunity costs - оптимальні витрати economics - економіка (як наука) production possibilities - виробничі можливості input – витрати

law of increasing opportunity costs - закон зростання оптимальних витрат economic growth - економічне зростання market mechanism - ринковий механізм available – доступний output – випуск продукціі, продуктивність

The economy is for us. «The economy» is an abstraction that refers to the sum of all our individual production and consumption activities. To produce anything, we need resources, or factors of production. Factors of production are the inputs – land, labour, and capital (buildings and machinery) we use to produce final goods and services (output). Unfortunately, the quantity of available resources is limited. We cannot produce everything we want in the quantities we desire. Resources are scarce relative to our desires. This fact forces us to make difficult choices. Economics is often defined as the study of how to allocate scarce resources.

Opportunity costs exist in all situations where there are not enough available resources to satisfy all our desires. Production possibilities are the alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology. According to the law of increasing opportunity costs we must give up everincreasing quantities of other goods and services in order to get more of a particular good. Economic growth is an increase in output; an expansion of production possibilities.

Over time the quantity of resources available for production has also increased. Each year our population grows a bit, enlarging the number of potential workers. Our stock of capital equipment has increased even faster. In addition the quality of our labor and capital resources has improved, as a result of more education (labour) and better machinery (capital).

Market mechanism is the use of market prices and sales to signal desired outputs (or resource allocations). The essential feature of the market mechanism is the price signal. If you want something and have enough money, you buy it. If many people do the same thing, the total sales of that product will rise, and its price may rise as well. Producers, seeing sales and prices rise, will be inclined to increase production.

I. Give English equivalents of the following:

згідно з законом зростання оптимальних витрат; важлива особливість ринкового механізму; кількість наявних ресурсів обмежена; відмовлятися від можливості; бути змушеним робити вибір; випускати кінцевий товар; задовольняти бажання; розподіляти ресурси

II. Fill in the gaps with available resources; inputs; final goods; market prices; production; output

1 Factors of production are the... – land, labour and capital we use to produce final goods and services (...). 2 Unfortunately the quantity of... is limited. 3 Production possibilities are the alternative combinations of... and services. 4 Over time the quantity of resources available for... has also increased. 5 Market mechanism is the use of... and sales to signal desired outputs.

III. Answer the questions:

1 What is «the economy»? 2 What do you need to produce the textbook and what are these inputs called? 3 Why do we have to choose among goods? 4 How is economics often defined? 5 What do we call the law according to which we must give up everincreasing quantities of other goods and services to get more of a particular good? 6 What are the essentials of the market mechanism?

IV. Translate into English:

1 Економічна наука вивчає виробництво та споживання. 2 Чинники виробництва – це земля, трудо-ві ресурси, основний капітал (обладнання та будівлі), якими ми користуємося для виробництва това-рів і послуг. 3 Ми не можемо виготовляти все, що бажаємо, і в кількостях, які нам потрібні, оскільки ресурси завжди обмежені. 4 Обмеженість ресурсів ставить нас перед вибором. 5 Економічна наука займається питаннями розміщення ресурсів, яких немає в достатній кількості, та тим, як їх краще ви-користовувати. 6 Нам доводиться відмовлятися від випуску певного виду товару, щоб забезпечити випуск іншого. 7 Головним у ринковому механізмі є чинник цін, який впливає на розширення або скорочення виробництва. 8 Якщо товаровиробники бачитимуть, що продаж певного виду товару і ціни на нього зростають, вони збільшуватимуть випуск цього товару.

14 WHAT IS ECONOMICS?

scarcity – недостатня кількість, брак чогось make choice – робити вибір resources – ресурси satisfy one's wants – задовольняти чиїсь потреби individual consumer – окремий споживач

be faced with the problem – стикатися з проблемою income – дохід private ownership – приватна власність profit – прибуток

Human wants are unlimited, but the resources necessary to satisfy those wants are limited. Thus, every society is faced with the problem of scarcity. Since there is not enough of everything to go around, everyone – individuals, business firms, and government – needs to make choices from among the things they want. In the process they will try to economize to get the most from what they have.

Economics is the social science that describes and analyzes choices from among scarce resources to satisfy its wants. The need to choose is imposed on us by our income, wealth and ability to borrow.

The food you eat, the home you live in, the clothes you wear, and the way you spend your leisure time are all affected, in part, by economic forces. Economic forces also affect decisions in the world of business. The more you know about the subject, the better career decisions you will be able to make.

The development of modern economics began in the 17th century. Since that time economists have developed methods for studying and explaining how individuals, business and nations use their economic resources. Large corporations use economists to study the way they do business and to suggest methods for making more efficient use of their employees, equipment, factories, and other resources.

The resources that go into the creation of goods and services are called the factors of production. They include natural resources, human resources, capital and entrepreneurship. Each factor of production has a place in our economic system, and each has a particular function. Our country is rich in natural resources. Economists also use the term «land» when they speak of natural resources as a factor of production.

The price paid for the use of land is called rent. Rent becomes income to the owner of the land.

The price paid for the use of labour is called wages. Wages represent income to workers, who own their labour.

Payment for the use of someone else's money or capital is called interest.

Entrepreneurship, closely associated with labour, is the managerial or organizational skills used by most firms to produce goods and services. The reward to entrepreneurs for the risks, innovative ideas and efforts that they have put into the business are profits (whatever remains after the owners of land, labour and capital have received their payments).

Every society must answer the fundamental economic questions:

1) What goods and services are to be produced?

2) How are they to be produced?

3) Who will receive them?

The way in which a society answers these questions is known as its economic system.

I. Translate into English:

приватнавласність; робити вибір; прибуток; задовольняти чиїсь потреби; ресурси; недостатнякількість; витрачати гроші; окремийспоживач; стикатися з проблемою; виробляти товари; прибуток

II. Fill in the gaps with: scarcity; wages; interest; rent; choices; systems; resources

1. Everyone goes through life having to make.... 2. The price paid for the use of land is called.... 3. The price paid for the use of labor is called.... 4. Traditional economic... are usually found in the more remote areas of the world. 5. Payment for the use of someone else's money, or capital, is called.... 6.... exists because human wants are unlimited, but the necessaries to satisfy those wants are limited. 7. The... or factors of production are land, labor, capital and entrepreneurship.

III. Answer the questions:

1 Why must all societies deal with scarcity? 2 What is economics? 3 Why is the need to choose imposed on us? 4 When did the development of modern economics begin? 5 What is rent? 6 What is wages? 7 What is interest? 8 What is profit? 9 What questions must every society provide answers to?

IV. Translate into English:

1 Бажання людини безмежні, а кошти, необхідні для їхнього здійснення, обмежені. 2 Перед кожним суспільством постає проблема нестатку. 3 Економічні чинники впливають на рішення у світі бізнесу. 4 Ресурси, необхідні для створення товарів та послуг, називають чинниками виробництва. 5 Заробітна плата - це винагорода, яку отримують робітники за свою працю. 6 Економіка - це наука, яка описує і аналізує вибір з недостатніх ресурсів, які мають задовольнити потреби населення. 7 Кожний чинник виробництва має місце в економічній системі і певну функцію.

Grammar: Future Simple / Continuous / Perfect

will do / will be doing / will have done

• Майбутній простий час виражає майбутній факт, обіцянку або передбачення.

I ’ll write the report tonight. – Я напишу звіт сьогодні ввечері.

Tomorrow’s weather will be cold but sunny. – Завтра погода буде холодною, але сонячною.

• Майбутній тривалий час виражає дію, яка триватиме у певний момент у майбутньому.

Don’t phone at 5.00. I ’ll be working in the garage. – Не дзвони о п’ятій. Я працюватиму в гаражі.

This time tomorrow I ’ ll be flying to Rome. – У цей час завтра я буду летіти до Риму.

• Майбутній доконаний час виражає дію, яку буде завершено до певного моменту в майбутньому.

I ’ll have done all my work by this evening. – Я виконаю усю роботу до сьогоднішнього вечора.

1 Put the beginnings and ends together. Translate the sentences into Ukrainian:

1. Buy the cat food here. 2. Don't give her your keys. 3. Get John to have a look at the TV. 4. 'He'll grow up one day.' 5. He'll need somebody 6. 'How's June?' 7. I must get back to work, 8. If he doesn't stop drinking, 9. If we give her a shout, 10. If you put lemon in it, 11. Knowing his luck, if he plays golf 12. No good sending her a bill, is it? 13. One day you'll be old, 14. She'll be fourteen 15. She'll forget

about you. and then your kids will laugh at you. He'll fix it. he'll be dead in five years. he'll drink it. he'll get hit on the nose with a ball. 'I hope you're right.' It'll be cheaper. on May 12th. otherwise I'll get the sack. She'll only lose them. she'll come and help. to help him. 'She'll be OK.' She'll just refuse to pay.

2 Ann is very ambitious. These are the things she believes she will be doing or will have done be the time she’s forty. Put each resolution into either the Future Continuous or Future Perfect. Start with I will…

-buy a Rolls Royce; -live in Beverly Hills; -join an exclusive tennis club; -become a multi-millionaire; -marry a handsome actor; -run my own computer business; -earn over $ 1,000,000 a year; -give up smoking

3 Complete the sentences using future continuous or future perfect:

1 By this time next week I.....................................(finish) all my exams. 2 This time next Saturday morning we............................ (fly) to Spain. 3 What............................(you/do) at this time next year? 4 Do you think we............................(read) books on computer in the future? 5 They...........................(invent) a robot which does all the housework by 2050. 6................................... (you / do) your homework by six o'clock tonight?

4 Read the conversation and choose the correct form of the future. Practise the dialogue in pairs:

Paul	By the way, I forgot to tell you. We will have moved / will be moving into our new house on Friday. They've just finished building it.
Diana	That's great. But aren't you forgetting that we'll be going / we'll have gone to the class end-of-term party on Friday?
Paul	Don't worry. I’ll still be able /1’ll still have been able to go to the party.
Diana	But you won't be finishing / won't have finished moving in by then. Look, I'll come / I'll have come and help you sort out your room next week if you like!
Paul	That's a very kind offer, but I think you'll be regretting / you'll regret it! You haven't seen all the junk I'm taking with me.
Diana	Well, you'll have / you’ll be having to have a throw-out session before you leave your old house.
Paul	That's easier said than done!

5 Put the verbs in brackets into the correct future form:

1 This May we… (know) each other for two years. 2 By 2050 man… (probably /colonise) the planet Mars. 3 Shall I call you later on? – Yes, but not after 9 p.m. I… (watch) the football match on TV. 4 Peter is 16 years old today. This time next year he… (be able to) to drive a car. 5 …Jordan… (be) home by 7 o'clock? – No, he won't. He… (still / play) basketball at school. 6 We're moving next month. By that time the builders… (finish) our new house. 7 The director is making a new film. He… (work) on it for six months.

MACROECONOMICS and MICROECONOMICS

aggregate	сукупність, ціле	consumption	споживання
simplified	спрощений	competition	конкуренція
equilibrium	рівновага	wages	заробітна плата

Economics as a science consists of two disciplines: macroeconomics and microeconomics.

Macroeconomics is the study of large economic systems, such as those of whole countries or areas of the world. It tries to explain broad aggregates and their interactions “top down”, that is, using a simplified form of general-equilibrium theory. Such aggregates include national income and output, the unemployment rate, and price inflation and subaggregates like total consumption and investment spending and their components. It also studies effects of monetary policy and fiscal policy.

Macroeconomic analysis also considers factors affecting the long-term level and growth of national income. Such factors include capital accumulation, technological change and labour force growth.

Microeconomics is the branch of economics that studies individual producers, consumers, or markets or the decisions and choices made by individual businesses, families, etc. about spending or earning money, for example the choice to charge a particular price for goods.

Microeconomics also studies how government activities such as regulations and taxes affect individual markets. Besides microeconomics tries to understand what factors affect the prices, wages and earnings.

1 What is microeconomics? 2 What is macroeconomics? 3 What factors are taken into consideration when macroeconomic analysis is performed? 4 What is the main difference between the two disciplines?

Translate into Ukrainian:

1. Economists have two ways of looking at economics and the economy. One is macro approach, and the other is the micro.

............................................................................................................................................................................

2. Macroeconomics is the study of the economy as a whole. In particular, it studies the overall values of output, unemployment and inflation.

..........................................................................................................................................................................................................................................................................................................................................................

3. Equilibrium is a situation in which the amount of particular goods or services that people want to buy (demand) at a particular price equals the amount that businesses want to supply (supply).

…………………………………………………………………………………………………………………….……………………………………………………………………………………………………………..

Grammar: Часи групи Perfect Continuous

1 Put together the beginnings and ends of the conversations. Translate the sentences into Ukrainian:

1 'Aren't you hungry?' 2 'Is it true that Philip's been arrested?' 3 'Janet seems very cheerful.' 4 'She's very dirty.' 5 'Why are my books all over the floor?' 6 'Why's your hair wet?' 7 'You all look very miserable.' 8 'You look tired.' 9 'You're very late.' 10 'Your hair's all white.'

'Helen's been looking at them.' ‘I've been gardening all afternoon.' 'I've been swimming.' 'I've been talking to Tony, and he just goes on and on.' 'No, I've been eating all day.' 'She's been cleaning the cellar.' 'She's been skiing with Roger for the last week.' 'Yes, he’s been stealing things from shop.’ 'Yes, I've been painting the ceiling.' 'Yes, we've been telling each other our stories.'

2 Complete the sentences using the present perfect continuous tense of the verbs below:

live play study wait walk watch work

1 We _______________ in England for nearly two years now. 2 Why are you so late? I ____________ here

for hours. 3 I _____________ German for three years, but I still don't speak it very well. 4 The boys must be tired. They ______________ football in the garden all afternoon. 5 It's time to do your homework. You ______________ TV all night. 6 John _____________ in his father's business since he left school. 7 We must be nearly there by now. We ________________ for over an hour.

3 Read the story and answer the questions using the past perfect continuous:

On Tuesday afternoon, everyone in my family was very busy - except me. During the afternoon Helen repaired her car; John practised his karate; Kate did some gardening Stephanie played tennis; Roger swam for half an hour; Pam went horse-riding; Philip painted the ceiling in his room light blue. I spent the afternoon sitting reading.

1) Who had black grease on her hands at teatime? Why? 2) Who had dirt on her hands and knees? Why? 3) Who was wearing a short white skirt? Why? 4) Who was wearing a white jacket and trousers and a black belt? Why? 5) Who was wearing high boots and a hard hat? Why? 6) Whose hair had light blue streaks in it? Why? 7) Whose hair was all wet? Why?

4 In a murder investigation, some suspects were asked by police what they had been doing at 8 o'clock the previous evening. They all told lies. Write sentences to explain what they told the police they had been doing, and what they had actually been doing:

e.g.: Mrs Oliver said she hadbeenreading, but actually she hadbeenwatching the neighbours through binoculars.

NAME	TOLD POLICE	TRUTH
Mrs Oliver Mr Lucas Mrs Allen Mr Nash Alice Pete Aunt Jane Miss Fry Rob	reading watching TV talking on the phone washing clothes playing cards studying chemistry writing letters washing her hair painting his flat	watching neighbours through binoculars stealing cars making a bomb forging £5 notes selling drugs fighting planning a bank robbery out dancing with her sister's boyfriend playing roulette

5 How long will you have been learning English / using your computer (mobile phone) / going to college / saving money for something you’d like to have / living in your present house by next summer?

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