Microeconomics and Macroeconomics.
Factors of Production.
1. For scientists, everything in the earth, air, and water – and beyond – is a source of data to be observed and studied. Yet the data often make little sense until they are seen through the lens of a microscope or telescope. Economic information, as with scientific data, takes on meaning when it is viewed through the most useful lens. Two of the lenses through which economists observe economic behaviour are microeconomics and macroeconomics.
2. Microeconomics is the study of the behaviour of individual players in an economy, such as individuals, families, and businesses. Macroeconomics is the study of the behaviour of the economy as a whole and involves topics such as inflation, unemployment, aggregate demand and aggregate supply. It is concerned with large-scale economic activity. While the limited spending power of an unemployed person would be in the realm of microeconomics, the effect of widespread unemployment on the whole nation would be a macroeconomic issue.
3. While microeconomics considers the individual consumer, macroeconomics studies the consumer sector. Macroeconomics also examines the business sector and the public, or government, sector.
4. Consumers have many economic wants. Wants are desires that can be satisfied by consuming goods or services. When making purchases, people often make a distinction between the things they need and the things they want. Needs are things, such as food, clothing and shelter that are necessary for survival.
5. People always want more, no matter how much they have already. In fact, wants are unlimited, but the resources available to satisfy them are limited. The result of this difference is scarcity, the situation that exists when there are not enough resources to meet human wants. Scarcity in the lives of individual consumers is the gap between their unlimited wants and limited resources. Scarcity is not a temporary shortage of some desired thing. It is a fundamental and ongoing tension that confronts individuals, businesses, producers, governments and whole societies. Shortages are often temporary. Scarcity, however, never ends because wants always exceed the resources available to satisfy them.
6. Indeed, scarcity requires every society to address three basic economic questions: What will be produced? How will it be produced? For whom will it be produced?
7. To understand how societies answer the first two basic questions – what to produce and how to produce – economists have identified the factors of production, or the economic (productive) resources needed to produce goods and services. They divide the factors of production into three basic categories: land, labour, and capital. In addition, many economists add a fourth factor of production, entrepreneurship, to the list. All of these factors have one thing in common – their supply is limited. Each factor plays a unique role in the production of goods, and each factor is clearly distinguishable from the others.
8. In economic terms, land includes all the natural resources found on or under the ground that are used to produce goods and services. Land can be defined as everything in the universe that is not created by human beings. Water, forests, and all kinds of wildlife belong in the category of land. So, too, do buried deposits of minerals, gas, and oil. Land is the passive factor in production. It is the starting point of all production, and it represents the most basic limitation on the productive capacity of an economy. In other words, no matter how much skilled labour and technological knowledge an economy has, it cannot create goods if it lacks natural resources.
9. Labour, sometimes called human resources, is all the human time, effort and talent that go into the making of products. Labour is not only the work done by factory workers and construction workers. It also includes the work of architects, teachers, doctors, shop assistants and government officials. In economics, labour is a measure of the work done by human beings. Labour is essential to production, since natural resources and capital goods are of no value unless they can be put to use.
10. Capital is all the resources made and used by people to produce and distribute goods and services. Tools, machinery and factories are all forms of capital. So are offices, warehouses, stores, roads and airplanes. In other words, capital is all of a producer’s physical resources. For this reason, capital is sometimes called physical capital, or real capital.
11. It is important to distinguish between capital goods and consumer goods. Capital goods are human-made resources that are used for the production of other goods and services. Consumer goods are finished products sold to consumers for their own personal use. Some things can be either consumer goods or capital goods, depending on how they are used.
12. While businesses invest in real capital, workers invest in human capital – people’s innate abilities and talents plus the knowledge and skills gained through experience. Human capital can be increased by investing in health care, education, and job training. Human capital includes such things as a college degree or good job training. When workers possess more human capital, they are more productive.
13. The fourth factor of production, entrepreneurship, brings the other three factors together. Entrepreneurship is the combination of vision, skill, ingenuity and willingness to take risks that is needed to create and run new businesses. Most entrepreneurs are innovators. They try to anticipate the wants of consumers and then satisfy these wants in new ways. This may involve developing a new product, method of production, or way of marketing or distributing products. Entrepreneurs are also risk takers. They risk their time, energy, creativity and money in the hope of making a profit.
14. Fixed and Variable factors: In the act of production a firm uses a variety of goods and services called production resources (factors of production) or inputs. These factors and services include plant and machinery, factory premises, tools and equipment, land, raw materials, labour etc. Some of these factors are fixed in size. A machine or manager has to be employed in its full capacity, irrespective of the volume of the output. Other factors like labour and raw materials can be employed in small or large units according to the varying quantity of output. These are variable factors of production. Fixed factors are indivisible while variable factors are divisible into small units. Fixed factors are supplementary in nature. Machines make productive activity more convenient and efficient. However, even in their absence, output of some volume can be produced. Variable factors are called prime factors without which no output can be produced.
15. The distinction between the two types of factors is the basis of cost-benefit analysis and the law of returns. If all the factors of production were perfectly divisible and variable, the cost of production would have increased in the exact proportion of the output. As this is not the case, a special cost-benefit analysis becomes important.
III. Vocabulary Reinforcement
A. Vocabulary
1. Match the following nouns with their definitions.
microeconomics, n | the basic things that a person must have in order to survive |
macroeconomics, n | buildings, machines, and equipment used in production plus inventories of raw materials, half-finished and finished goods |
goods, n | the willingness and ability of producers to offer goods and services for sale |
needs, n | all "gifts of nature"- water, forests, minerals - used for production or for direct consumption |
consumer, n | the study of large economic systems such as those of a whole country or area of the world |
human capital, n | the resources needed to produce goods and services |
physical capital, n | the ability to produce things |
supply, n | the willingness to buy goods or services and the ability to pay for them |
productivity, n | the amount of goods and services that results from the use of land, labour, capital, and entrepreneurship |
factors of production, n | the total amount of goods and services produced in the economy during a particular period of time |
natural resources, n | someone who buys and uses products and services |
demand, n | people’s innate abilities and talents plus their knowledge, skills, and experience that make them economically productive |
productive capacity, n | material objects that satisfy people’s wants and needs |
output, n | the study of small economic systems that are part of national or international systems |
2. Now match the following verbs with their definitions.
distribute | buy and use goods, services, energy, or natural materials |
invest | be more than a particular number or amount |
anticipate | make goods available to the consumers after they have been produced |
consume | buy something or spend money or time on something that will be useful for you |
exceed | expect that something will happen and be ready for it |
B. Word Families
Complete the chart.
Verb | Adjective | Noun |
consumer | ||
excess | ||
product | ||
distribute | ||
limited | ||
divide | ||
analysis | ||
invest |
C. Word Groups
1. Match the words having similar meanings.
physical capital | meet |
factors of production | information |
confront | whole, total |
satisfy (demands) | oppose |
entrepreneurship | equipment |
behaviour | fixed assets |
data | business undertaking |
machinery | conduct |
aggregate | production resources |
2. Match the words having opposite meanings.
supplementary | ongoing |
input | supply |
shortage | manufactured |
temporary | output |
demand | excess, surplus |
raw | prime |
D. Word Fields
Which of the things below belong to capital goods and which of them belong to consumer goods?
TV sets; factories; machines; food; clothing; tools; computers; railroads; automobiles; tractors; airplanes; furniture.
E. Word Usage
plete: use an appropriate preposition where necessary.
in(4),on, for, of, with, through |
1. Economic information takes … meaning when it is viewed … the most useful lens.
2. Macroeconomics is concerned … large-scale economic activity.
3. All kinds of wildlife belong … the category … land.
4. An economy cannot create goods if it is lacking … natural resources.
5. Some factors of production are fixed … size.
6. There is a great demand … home computers.
7. Small cars are … demand nowadays.
2. Linking: match the first half of each sentence with the most appropriate second half.
1. Economists study economic behaviour through … | a) all the resources made and used by people. |
2. Macroeconomics is concerned with … | b) all the natural resources that are used to produce goods and services. |
3. Microeconomics is concerned with … | c) no output can be produced. |
4. Scarcity is the result of … | d) the distinction between variable and invariable factors. |
5. Land includes … | e) vision, skill, ingenuity and willingness to take risks. |
6. Labour includes … | f) microeconomics and macroeconomics. |
7. Capital includes … | g) unlimited wants and limited resources. |
8. Entrepreneurship includes … | h) all the human time, effort and talent that go into the making of goods. |
9. Without variable factors of production … | i) the effect of widespread unemployment on the whole nation. |
10. The basis of cost analysis and the law of returns is … | j) individuals, families, and businesses. |
plete: choose the key concept that best completes the sentence.
Consumer, macroeconomics, factors of production, microeconomics, economic model, producer, scarcity, wants
1 is the fundamental economic problem. It arises because human 2 are limitless, while resources are limited. It affects what a 3 buys and what a 4 makes. It affects what is produced, how it is produced, and who gets what is produced. It affects how the four 5 are put to use.
Economists often use a 6, a simplified representation of reality, to clarify concepts. Economists use such tools in 7, the study of the economic behaviour of individual persons, families, and businesses, and in 8, the study of the economy as a whole.
plete: use appropriate information from the text to finish the following sentences.
1. Macroeconomics considers … .
2. Microeconomics examines … .
3. Economists divide the factors of production into … .
4. All the factors of production have one thing in common – … .
5. Physical capital is … , while human capital is … .
6. Translate: give the English equivalents for the following word combinations.
Покупательная способность; экономическое поведение; совокупный спрос; широкомасштабная экономическая деятельность; государственный сектор; удовлетворять потребности; производительность; издержки производства; производственная мощность; работа, требующая высокой квалификации; квалифицированная рабочая сила; природные богатства; распространять товары и услуги; анализ затрат (издержек); предвидеть потребности потребителей.
7. Translate the following sentences into English.
1. Факторы производства – это экономические ресурсы, используемые для производства товаров и услуг. Факторы производства подразделяются на материальные ресурсы (земля, или сырьевые материалы, и капитал) и людские ресурсы (труд и предпринимательская способность).
2. К понятию земля относятся все естественные, природные ресурсы, которые применяются в производственном процессе - земельные участки, полезные ископаемые, леса, реки и т. п.
3. Понятие капитал охватывает все производственные, т. е. созданные человеком, средства производства – здания, сооружения, оборудование, инструменты и т. п., используемые в производстве товаров и услуг и доставке их конечному потребителю.
4. В экономике различают понятия реальный капитал и финансовый капитал. Реальный капитал – это инструменты, машины и др. производительное оборудование. Это экономический ресурс. Финансовый капитал – это деньги и близкие к ним финансовые инструменты
– акции, облигации и т. п. Финансовый капитал не является экономическим ресурсом.
5. Предпринимательская способность – в экономической науке – это способность человека использовать определенное сочетание ресурсов для производства товара, принимать разумные последовательные решения, применять новшества и идти на (оправданный) риск.
IV. Reading
A. Reading for the Main Idea
Read the text to understand the main idea of it and try the following tasks.
1. Think of a statement that best summarises the main idea of the text.
2. Answer the following questions.
1. According to the text, what are the differences between microeconomics and macroeconomics?
2. What is said in the text about the ways scarcity affects both consumers and producers?
3. What are the four factors of production and how do they relate to scarcity?
B. Reading for Details
Read the text again to understand details and try the following tasks.
1. Understanding Expressions: give the best explanation for each of these phrases used in the text.
To observe economic behaviour; to satisfy economic wants; to exceed the available resources; natural resources; to anticipate the wants of consumers; input and output; raw materials.
|
Из за большого объема этот материал размещен на нескольких страницах:
1 2 3 4 5 6 7 8 9 10 |
