Unit 2 What is Economics?

Economics is the social science that studies the production, distribution, and consumption of goods and services. The word 'economics' is from the Greek for οἶκος (oikos: house) and νόμος (nomos: custom or law), hence "rules of the house(hold)."

A definition that captures much of modern economics is that of Lionel Robbins in a 1932 essay: "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." Scarcity means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problem. The subject thus defined involves the study of choices as they are affected by incentives and resources.

Areas of economics may be divided or classified in various ways, including:

microeconomics and macroeconomics

positive economics ("what is") and normative economics ("what ought to be")

mainstream economics and heterodox economics

fields and broader categories within economics.

One of the uses of economics is to explain how economies work and what the relations are between economic players (agents) in the larger society. Methods of economic analysis have been increasingly applied to fields that involve people (officials included) making choices in a social context, such as crime, education, the family, health, law, politics, religion, social institutions, and war.

Microeconomics is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources, typically in markets where goods or services are being bought and sold.

Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the supply and demand of goods and services

Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. Macroeconomists seek to understand the determinants of aggregate trends in the economy with particular focus on national income, unemployment, inflation, investment, and international trade. In contrast, microeconomics is primarily focused on the determination of prices and the role of prices in allocating scarce resources.

While macroeconomics is a broad field of study, there are two areas of research that are emblematic of the discipline: The attempt to understand the causes and consequences of short-run fluctuations in national income (the business cycle), and the attempt to understand the determinants of long-run economic growth (increases in national income).

Macroeconomic models and their forecasts are used by both governments and large corporations to assist in the development and evaluation of economic policy and business strategy.

Vocabulary

production - производство

distribution - распределение

consumption - потребление

definition - определение

scarcity - дефицит

incentive - стимул

society - общество

development - развитие

evaluation - оценка

national income - национальный доход

unemployment - безработица

inflation -инфляция

investment инвестиции

international trade - международная торговля

to determine - определять

aggregate trends - совокупные тенденции

scarce resources - недостаточные ресурсы

I. Write sentences with the following words:

fields - отрасли

supply - предложение

demand - спрос

competitive markets - конкурентные рынки

wage rates - ставки заработной платы

profit margin - размер прибыли

utility - прибыль

entrepreneurs - предприниматели

profit - прибыль

employment - занятость

prosperity - процветание

consumers - потребители

I. Find out definitions of Economics made by John Maynard Keynes, Alfred Marshal and etc.

II. Write an essay: “Why did you choose an economic education?”

III. Write an essay about your university (academy). Answer the following questions.

1.When was your university founded?

2.Did any famous people graduate from your university?

3.How many departments are there at your university?

4.Who is the head of the university?

5.Who is the head of your faculty?

6.What is the largest faculty? What is the smallest?

7.What is the most popular? What is the least popular?

IV. Find information on the Internet about the Fac­ulty of Economics at the following universities:

a) London School of Economics;

b) Oxford University;

c) The University of Bath;

d) The University of Lancaster.