LIMITED RESOURCES: THE NEED TO CHOOSE

 

We make choices every day. We have to because, as we have seen, not all of our wants can be satisfied. Therefore we have to decide which wants we will satisfy and which we will not.

Should I take a bus to college or use the money to buy some more paper for my Business studies notes? Do I buy a new coat or spend the money on a new radio? All choices involve giving something up.

This problem exists for governments and businesses as well as for individuals. Should the government build another hospital, or a new road into the city? Should the owner of a business purchase a computer or use the resources to pay for a new advertising company? All of these choices involve giving something up too. If the resources of the factors of production were not scarce, there would be no need to choose. We could all have everything we wanted!

In making any choice, we need to consider what we are giving up, to make sure it is not worth more to us than the option we are choosing. This is called considering OPPORTUNITY COST of a decision – the lost opportunity resulting from the choice of something else.

To summarize: human wants are unlimited but the resources necessary to satisfy those wants are limited. Thus, economics deals with the problems which every society is faced with throughout history – the problems of scarcity and choice.

Scarcity is the imbalance between our wants and the means to satisfy those wants. The problem of scarcity is faced by rich as well as poor societies. That is why it is fundamental economic problem.

WORD STUDY

Ex. 10. Study the different meanings of the following words and use them to translate the

          sentences.

 

a) means n           - 1) средство

                              2) имущество, средства существования

mean v              - 1) иметь ввиду

                              2) подразумевать

                              3) означать

 

1. Economists study how to use scarce means to satisfy our wants.

2. The word “money” means anything which is used as a medium of exchange.

3. Money is a means of exchange and a store of value.

4. What do economists mean by “purchasing power” (покупательная способность)?

5. The modern word “economics” has its origin in the Greek word “oikonomos” meaning a housekeeper.

b) cause n         1. причина

                                  2. основание   

                              3. повод

                              4. дело

                              5. судебное дело, процесс.

  сause v           - являться причиной

 

1. That was the cause of all our difficulties.

2. There is no cause for alarm.

3. That’s a lost cause.

4. He did much for the cost of science.

5. What caused the accident?

6. Damage of the goods may be caused by improper packing.

7. The ruin of the empire was caused by the loss of freedom and the growth of despotism

Ex. 11. Match words with their definitions.

 

_____ economics	a. items of value that can be seen and touched.
_____ factors of production	b. takes business risks in hopes of earning a profit.
_____ needs	c. land, labour, capital and entrepreneurship
_____ services	d. where buyers and sellers are brought together.
_____ opportunity cost	e. goods or services essential for living.
_____ wants	f. items of value that cannot be seen or touched.
_____ market	g. not enough of everything to satisfy everybody’s wants.
_____ scarcity	h. study of how people use scarce resources to meet needs and wants
_____ goods	i. what one must give up to obtain a good or service.
_____   entrepreneur	j. goods or services which people would like to have, but which are not essential for a living.

 

 

Ex. 12. Give the English equivalents to the following words and phrases. Recollect the

Sentences of the text where they were used.

 

сталкиваться с проблемой _________________________________

удовлетворять желания ___________________________________

делать выбор ____________________________________________

экономить ______________________________________________

ограничивать выбор ______________________________________

проблема нехватки _______________________________________

ограниченные ресурсы ____________________________________

удвоить доходы __________________________________________

истинная причина ________________________________________

финансовые ресурсы ______________________________________

уровень жизни ___________________________________________

отказываться от чего-либо _________________________________

способность к риску ______________________________________

рекламная кампания ______________________________________

“цена выбора” ___________________________________________

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