Speaking

1. Talk to your partner and decide which of the following statements are true about macroeconomics

a) Macroeconomics deals with global questions only.

b) Landed gentry are those who have no chance to find a job on speciality.

c) Society reveals that it is not against inflation because the government always makes compensations.

d) Government policy always makes some effects on the national economy.

e) Macroeconomic analysis shows the development of the economic theory.

2. Explain in your own words the importance and practical applications of the following concepts. (Give the Russian equivalents)

a) aggregate price level

b) total employment rate

c) labour force

d) GDP

e) national income

f) personal income

g) personal disposable income

3. Work in pairs or small groups. Think and tell if you are able to answer the following macroeconomic questions (If not, explain why it is impossible)

a) What does it happen when the price level is rising?

b) Is it possible for macroeconomists to realize how interactions within and between the economies can lead to such outcomes as inflation and unemployment?

Section 2.What is microeconomics? Key vocabulary

1. Read and remember the following words

congestion – перенаселение

broad – широкий

cut across – соприкасаться

treatment – обработка

equilibrium – равновесие

simultaneously – одновременно

pattern – образец. Модель

devise – изобретать

judicious – разумный, благоразумный

simplification – упрощение

proceed down – проходить

preserve – сохранять, охранять

emphasize – подчеркивать

instance – пример, отдельный случай

2. Find the equivalents to the following word combinations

particular branch, urban economics, area of economic life, broad division of approaches, cited above, particular commodities, individual households, relative price, sophisticated branch of microeconomics

3. Give the English for the following

сохранить простоту анализа, полная модель потребления, упустить суть явления, без разрушения действительности, подробное рассмотрение вопроса, альтернативное упрощение, скрывать

Text

1. Listen, read and translate the text

MICROECONOMICS

Many economists specialize in a particular branch of the subject. Labour economics deals with problem of the labour market as viewed by firms, workers, and society as a whole. Urban economics deals with city problems: land use, transport, congestion, and housing. How­ever, we need not classify branches of econo­mics according to the area of economic life in which we ask the standard questions what, how, and for whom. We can also classify branches of economics according to the approach or methodology that is used. The very broad division of approaches into microeconomic and macroeconomic cuts across the large number of subject groupings cited above.

Microeconomic analysis offers a detailed treatment of individual decisions about particular commodities.

For example, we might study why individual households prefer cars to bicycles and how producers decide whether to produce cars or bicycles. We can then aggregate the behaviour of all households and all firms to discuss total car purchases and total car production. Within a market economy we can discuss the market for cars. Comparing this with the market for bicycles, we may be able to explain the relative price of cars and bicycles and the relative output of these two goods. The sophisticated branch of microeconomics known as general equilibrium theory extends this approach to its logical conclusion. It studies simultaneously every market for every com­modity. From this it is hoped that we can understand the complete pattern of con­sumption, production, and exchange in the whole economy at a point in time.

If you think this sounds very complicated you are correct. It is. For many purposes, the analysis becomes so complicated that we tend to lose track of the phenomena in which we were interested. The interesting task for econo­mics, a task that retains an element of art in economic science, is to devise judicious simpli­fications which keep the analysis manageable without distorting reality too much. It is here that microeconomists and macroeconomists proceed down different avenues. Microecono­mists tend to offer a detailed treatment of one aspect of economic behaviour but ignore interactions with the rest of the economy in order to preserve the simplicity of the analysis. A microeconomic analysis of miners' wages would emphasize the characteristics of miners and the ability of mine owners to pay. It would largely neglect the chain of indirect effects to which a rise in miners' wages might give rise. For example, car workers might use the precedent of the miners' pay increase to secure higher wages in the car industry, thus being able to afford larger houses which burned more coal in heating systems. When microeconomic analysis ignores such indirectly in­duced effects it is said to be partial analysis.

In some instances, indirect effects may not be too important and it will make sense for economists to devote their efforts to very detailed analyses of particular industries or activities. In other circumstances, the indirect effects are too important to be swept under the carpet and an alternative simplification must be found.

Language practice