1. Pay attention to the pronunciation of the following terms.

[ju:] consume, distribution

[ei] paid, speculation, scale, separate

[i] briefly, principle, issue, discipline

2. Pay attention to the stress in the following words. Pronounce them.

at´tempt	de´termine	in´flation
ex´clusively	´output	distri´butional

3. Read the text and fulfil the exercises. What does economics study?

Economics is a social science studying economy. Like the natural sciences and other social sciences, economics attempts to find laws and principles of economic functioning of society. Most students who take economics for the first time can hardly imagine the range of questions which this science studies. Some think that economics will teach them about the stock market, or what to do with their money. Others think that economics deals exclusively with problems like inflation and unemployment. In fact, it deals with all these subjects but they are parts of a much larger system.

First of all, there are two major divisions of economics: microeconomics and macroeconomics. Microeconomics deals with the functioning of individual industries and the behavior of individual economic decision making units: single business firms and households. Macroeconomics explores the decisions that individual businesses and consumers make. The choices of firms about what to produce and how much to charge and the choices of households about what to buy and how much of it to buy help to explain why the economy produces the things it does.

Another big question that microeconomics addresses is who gets the things that are produced. Wealthy households get more output than do poor households, and the forces that determine this distribution of output are outside the scope of microeconomics. Why do we have poverty? Who is poor? Why do some jobs pay more than others? Think about all the things we consume in a day on the scale of a town, a whole country. Somebody decided to build the factories. Somebody decided to construct roads, build the housing, produce the cars, knit the shirts, and smoke the bacon. Why? What is going on in all those buildings? It is easy to see that understanding individual micro decisions is very important to any understanding of your society. Macroeconomics, in its turn, deals with the functioning of national economic complex and the behavior of the main classes and social groups.

4. Answer the following questions.

1) What branch of science does economics belong to?

2) What problems does economics deal with?

3) Why do you think some people are poor and others are rich?

4) Which two main divisions of economics do you know?

5) What do micro- and macroeconomics deal with?

5. Complete the sentences. Use the information from the text.

1) Economics studies a wide _________ questions.

2) Economics is closely tied with ________ .

3) Many social philosophers were trying to solve a questions of ________ .

4) Economics is subdivided into ________ .

5) Microeconomics deals with ________ industries.

6) A household can be considered as a _______ .

7) The firm must make a ________ what to produce.

8) Microeconomics doesn’t ______ with the questions of output distribution.

9) The functioning of national economic complex is the sphere of ________ .