II. Read the text to fulfil the tasks. 1. Wants and their satisfaction.Every day we face problems

1. Wants and their satisfaction.Every day we face problems. A house-wife with a limited amount of money with her does a lot of shopping; a shop keeper sells and purchases a large amount of goods; a factory – owner decides how many labourers to employ, how much to produce and what price to sell the product. These and similar problems which arise out of the activity of earning and spending are called economic problems.

The very starting point of economic activities is the existence of wants. Everybody always wants or needs something. We need to eat food, drink water, shelter, clothing and a lot of other things to keep us happy. All these needs are called wants in economic science. Some people have more wants then others, but there is nobody who has no wants at all. Where wants exist, people naturally try to satisfy their wants and it is a fact of life that the means of satisfying wants are limited. Nobody has everything he desires, because goods are scarce in relation to their demand. As goods become scarce people try to store them and we begin to use such terms as "price", "value", etc.

We satisfy our wants by consuming goods and services. We "consume" a thing when we use it for our satisfaction. In some kinds of consumption like eating we immediately use up the goods, whereas when we use a pen or bicycle, or live in a house, we spread the "consumption" over a number of years. Thus if we consume something it has some usefulness for us.

This usefulness or the capacity of a thing to satisfy our wants is called utility. As we buy and sell everything for money, we use money value to compare utilities of various things through money.

To summarize: human wants are unlimited, but the resources necessary to satisfy those wants are limited. Every society has an identical problem, the problem of scarcity.

2. Definition and subject of economics.Everyone – individuals, business, firms and government – need to make choices from among the things they want. In the process they will try to economize, to get the most from what they have. With this in mind we define economics as the social science that describes and analyzes, how society chooses from among scarce resources to satisfy its wants.

The need to choose is limited by our income, wealth and ability to borrow. We see that economics deals with the problem of scarcity and choices that have faced societies and nations throughout history but the development of modern economics began in the 17^th century. Economists started to develop methods for studying and explaining how individuals, businesses and nations use the economic resources available. Large corporations use economists to study the ways they do business and to suggest methods for making more efficient uses of their employees, equipment, factories and other resources.

The Russian government also employs economists to study economic problems and to suggest ways to solve them. Economists develop economic principles and models that try to explain economic events. They have two ways of looking at economics and economy. One is the macro approach and the other is micro. The macroeconomics approach is to study the economy as a whole; microeconomics is the study of individual consumers and the individual businesses. Macroeconomics examines questions such as how fast the economy grows, how much overall output is being generated, how much total income is. It also seeks solution of macroeconomical problems such as how to increase employment and output of goods and services. Microeconomics examines cause-and-effect relationships that influence choices of individuals, business firms and society, and also deals with such things as scarcity, choice, production and consumption. It also studies prices and their relationship to units in the economy.

The study of economics will help you to understand economic forces better and enable you to live a fuller life. Economic forces also affect decisions in the world of business. In fact, one common definition of economics is "the study of how people make a living". The more you know about the subject, the better career decisions you will be able to make.

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