Text 11. Microeconomic Goals

Economic Goals

Micro		Macro
-Efficiency		- Full Employment
- Equity		- Stability
		- Growth

Figure 1. Economic Goals.

 

Efficiency and equity are the two microeconomic goals most relevant to markets, industries, and parts of the economy, and are thus important to the study of microeconomics.

Efficiency. Efficiency is achieved when society is able to get the greatest amount of satisfaction from available resources. With efficiency, society cannot change the way resources are used in any way that would increase the total amount of satisfaction obtained by society. The pervasive scarcity problem is best addressed when limited resources are used to satisfy as many wants and needs as possible.

While efficiency is indicated by equality between demand price and supply price for a given market, there are no clear-cut comprehensive indicators for attaining this efficiency goal. While it is possible, in theory, to pinpoint what is needed for efficiency, the complexity of the economy makes the task difficult to accomplish in practice.

Equity. Equity is achieved when income and wealth are fairly distributed within a society. Almost everyone wants a fair distribution. However, what constitutes a fair and equitable distribution is debatable. Some might contend that equity is achieved when everyone has the same income and wealth. Others contend that equity results when people receive income and wealth based on the value of their production. Still others argue that equity is achieved when each has only the income and wealth that they need.

Equity means income and wealth are distributed according to a standard of fairness. But what is the fairness standard? It could be equality. Or it could be the productive value of resources. Or it could be need. Standards for equity moves into the realm of normative economics.

 

Exercise 74 . Make sure you can translate the following phrases.

To achieve efficiency, the greatest amount of satisfaction, equality, complexity of the economy, to accomplish in practice, a fair distribution, productive value of resources.

 

Exercise 75. Answer the question.

1. What are the two microeconomic goals? 2. What are they relevant to? 3. What is efficiency? 4. How is efficiency achieved? 5. How is efficiency indicated? 6. Why is efficiency difficult to be accomplished in practice? 7. What is equity? 8. How is equity achieved? 9. What constitutes a fair distribution? Why is it debatable? 10. What is a standard of fairness?

 

Exercise 76. Match the terms and their definitions.

1. distribution	a) organized economic activity concerned with manufacture, extraction and processing of raw materials, or construction.
2. industry	b) the quality of being reasonable, fair .
3. efficiency	c) the division of the total income of a community among its members.
4. equity	d) the fulfillment of a desire.
5. satisfaction	e) the ratio of the useful work done to the energy supplied to it.

 

Exercise 78. Find sentences with the Passive Voice in text 11.

 

Exercise 79 . Translate into English.

1. Ефективність досягається тоді, коли суспільство спроможне отримати максимальне задоволення з наявних ресурсів. 2. Ефективність визначається рівністю між ціною, яку покупці готові сплатити, та ціною пропозиції. 3. Рівність досягається тоді, коли доходи та добробут справедливо розподілені в суспільстві у відповідності до стандартів справедливості.

 

Exercise 80 . Mind the spelling of the words. Insert the omitted letters. a . . iev. , scar . . ty, stan . ar. , eq . . ty, effi . iency, e . . ality, soc .. ty, comple . . ty, w . . lth, v . . ue.

 

Exercise 81. Learn the following words and word combinations.

aggregate	– сукупний, загальний
lessen	– зменшувати
recession	– зниження, спад (виробництва, попиту тощо)
at hand	– наявний
disruption	– розпад, порушення, перерва у виробництві
pursue something	– гнатися (за чимось); переслідувати
fluctuation	– коливання

Exercise 82. Read, translate and give the gist of text 12.

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