Text a. Economics and Economists

Read and translate the text.

Economics is as old as the human race. When ancient men changed the skins of the animals they hunted for axes they developed economic relations. But economics as a science is relatively new. The first major book on economics “The Wealth of Nations” by Adam Smith (an Englishman) was published in 1776. Since that time the economics has developed rapidly and now there are many branches of it such as microeconomics, international economics and econometrics and many competing schools of the science.

Economics is a theory of how society works. The great economist Alfred Marshall defined economics as “the study of a man in the everyday business of life”. This definition is rather vague. The guiding idea in economics is scarcity. In our world everything is scarce: not just gold, diamonds and oil but also food and water. There are not enough resources to give people all they want. Limited resources are both in rich and poor countries. The economists’ job is to evaluate the choices that exist for the use of these resources. Thus we have another characteristic of economics – the choice. Still another aspect of economics is people themselves. People need not only food and clothes but cars, telephones, TV – sets and many other goods. So the three vital ingredients of economics are people, scarcity and choice. Thus we can define economics as the human science which studies the relationship between scarce resources and the choice how to use these resources.

The great American economist Paul said that every economic society has to answer three fundamental questions: What, How and For whom.

What? – What goods to produce with scarce resources: clothes, food, cars, submarines, TV sets, planes?

How? – How to combine basic resources of labor and land to produce the goods and services which we want?

For whom? – How to distribute produced goods and services among people?

There is also an alternative definition of economics – that is the study of wealth. By wealth the economists mean all the assets which make our standard of living: food, clothes, houses, schools, hospitals, cars, etc. The primary concern of economics is to increase the wealth of a society and to consider welfare. Welfare is the whole state of well – being. People need not only more goods but also good conditions of work, law and order.

A basic understanding of economics is very important for everybody because most of our everyday problems have economic aspects. These problems are unemployment, inflation, equal distribution of a country’s income, welfare social programs, etc.

Economics has practical value in business. Business executives should understand how economics works to formulate business policies and make reasonable business decisions. Knowledge of economics may be helpful in running a business or managing one’s personal finances.

Every year a lot of young people enter high educational establishments and begin to study economics. After graduating they will be certified economists, whose work is very important for economies of their countries. Economists work for government, business and consulting firms. Economists work as directors and managers of companies, as financial managers, bank clerks, accountants, auditors, marketing and advertising executives. Their job is to apply economic analysis to the real world. The better the economists will apply economic analysis to the world the more the whole society will benefit.

Exercise I. Match English and Russian equivalents.

1. human race

2. economic relations

3. microeconomics

4. everyday business life

5. limited resources

6. scarcity and choice

7. standard of living

8. wealth of a society

9. distribution of a country’s income

10. practical value in business

11. to apply economic analysis

12. the whole society will benefit

1. микроэкономика

2. повседневная деловая жизнь

3. род людской

4. ограниченные ресурсы

5. нехватка и выбор

6. распределение доходов страны

7. экономические отношения

8. все общество получит преимущества

9. практическое применение в бизнесе

10. уровень жизни

11. благосостояние общества

12. применять экономический анализ

Exercise II. Choose the best endings to the following statements.

1. The first major book on economics Adam Smith’s “The Wealth of Nations” was published in …

a) 1876; b) 1776; c) 1676.

2. Economics as an academic science is relatively …

a) new; b) old; c) dull.

3. The guiding idea in economics is …

a) production; b) planning; c) scarcity.

4. The economists’ job is to evaluate the choices that exist for the use of …

a) resources; b) food; c) machines.

5. One alternative definition of economics is that it is the study of …

a) needs; b) wealth; c) services.

6. The concept of welfare is concerned with the whole state of …

a) health; b) law; c) well – being.

7. The great American economist Paul said that every economic society has to answer …

a) three fundamental questions; b) two fundamental questions; c) four fundamental questions.

Exercise III. Complete the sentences according to the text.

1. Economics is as old as …

2. There are many branches of economics such as …

3. In our world everything is …

4. The economists’ job is to evaluate …

5. The three vital ingredients of economics are …

6. Thus we can define economics as …

Exercise IV. Answer the questions on the text.

1. Is economics as old as the human race?

2. What branches of economics are there?

3. What is a theory of economics?

4. What is Alfred Marshall’s definition of economics?

5. What is the guiding idea of economics?

6. What are the three vital ingredients of economics?

7. What three fundamental questions has economics to answer according to the

great American economist Paul?

8. What is the alternative definition of economics?

9. What is the primary concern of economics?

10. Why is a basic understanding of economics very important for everybody?

11. Why should businessmen understand economics?

12. Where do economists work?

13. What is the job of any economist in general?

14. What jobs do economists perform?

Exercise V. Think and answer.

1. Why did you choose the profession of an economist?

2. What field of economy would you like to work in?