Microeconomics and macroeconomics

Lead-in

1. Do you know what the difference is between macroeconomics and microeconomics?

2. Are the following statements about microeconomics or macroeconomics?

· … deals with topics of inflation and unemployment.

· … studies how people make decisions to allocate limited resources.

· In … the focus is placed on factors that affect the decisions made by firms and individuals.

· ... includes a national, regional, or global economy.

Key Vocabulary

Study the following vocabulary and do the tasks that follow.

1. allocation n	распределение
2. distribute v	распределять
3. divide v	делиться, подразделять
4. behaviour n	поведение
5. affect v	влиять
6. make a profit	получать прибыль
7. study v	изучать
8. entire adj	весь, взятый в целом
9. unemployment n	безработица
10. income n	доход
11. rate of growth	темп роста
12. gross domestic product (GDP)	валовый внутренний продукт (ВВП)
13. price level	ценовой уровень
14. cause v	быть причиной, вызывать
15. trend n	направление, тенденция
16. interdependent adj	взаимозависимый

Pre-reading Activities

1. Use a dictionary and underline the odd word (лишнее слово) in each line. Explain your choice and learn the vocabulary.

a) distribution – allocation – consumption

b) examine – deal with – study

c) effect – affect – influence

d) allocate – connect – distribute

2. Complete the crossword puzzle using your active vocabulary.

E

C

O

N

O

M

I

4C

S

1. the state of not having a job

2. complete or full

3. money earned by work or investments

4. to make something happen

5. distribution

6. the amount of money expected, required, or given in payment for something

7. a general direction in which something is developing or changing

8. to inspect (someone or something) thoroughly in order to determine their nature or condition

9. to have an influence on someone or something, or to cause them to change

Reading

Read the text and check whether you answered the Lead-in questions correctly.

Economics is the science that deals with production, allocation, and use of goods and services. It is important to study how resources can best be distributed to meet the needs of the greatest number of people. As we are more connected globally to one another, the study of economics becomes an extremely important issue.

Economics is a broad subject that can be divided into two areas: microeconomics and macroeconomics.

Microeconomics, the study of the economic behaviour of small economic groups such as firms and families, is one of the largest subfields in economics. Microeconomics deals with economic decisions made at a low, or micro, level. It is the analysis of the decisions made by individuals and groups, the factors that affect those decisions, and how those decisions affect others.

Microeconomics asks questions: “How do individuals make consumption decisions?”, “How do firms make profits and price their goods and services?”, etc.

“Macro” means “large”. Macroeconomics is the field of economics that studies the behaviour of the economy as a whole, not just specific companies, but entire industries and economies. This area of economics examines economy-wide phenomena such as changes in unemployment, national income, rate of growth, gross domestic product, inflation and price levels. Macroeconomics asks questions like: “What causes inflation?”, “What effect does the national debt have on economic growth?”, etc.

So, macroeconomics is focused on the movement and trends in the economy as a whole, while in microeconomics the focus is placed on factors that affect the decisions made by firms and individuals. These two studies of economics are different, but they are interdependent and complement each other. The factors that are studied by macro- and microeconomics often influence each other.

Comprehension

1. Match these sentence halves describing economics and its two areas.

1. Microeconomics is	a) the economic behavior of individual consumers, firms, and industries.
2. Economics is	b) one of the two main fields of the social science of economics.
3. Microeconomics is the study of	c) the influence of all economic factors on each other.
4. Macroeconomics seeks to understand	d) a social science concerned with the production, distribution, exchange, and consumption of goods and services.

2. Decide whether the following statements are True or False.

1. Resources should be distributed in the best way to meet the needs of people.

2. The study of macroeconomics is an extremely important issue.

3. Microeconomics is one of the largest subfields in economics.

4. Microeconomics is the analysis of the decisions made by individuals and groups.

5. Macroeconomics deals with economic decisions made at a low level.

6. The two studies of economics complement each other.

3. Answer the questions.

1. What is economics?

2. Why is it important to study economics?

3. Is microeconomics the study of the economic behaviour of small economic groups?

4. What kind of analysis is microeconomics?

5. What does macroeconomics examine?

6. What questions are asked by the two areas of economics?

7. Do factors that are studied by macro- and microeconomics influence each other? In what way?

Vocabulary Focus

1. Complete the gaps choosing the right alternative.

1. The current … rate is six percent.

a) behaviour

b) unemployment

c) allocation

2. Cold weather … the crops.

a) affected

b) studied

c) caused

3. I haven't had much … from my business this year.

a) income

b) rate of growth

c) price level

4. Digital technology is the latest … in television.

a) income

b) trend

c) behavior

5. An accountant (бухгалтер) has been employed to … the company's books.

a) cause

b) distribute

c) examine

6. We need to find the best way to … our resources.

a) divide

b) allocate

c) influence

2. Fill in the gaps with prepositions, where necessary.

1. The bank deals directly … the private sector.

2. I need time to study … this contract before signing it.

3. No one knows how this decision will influence … the outcome of the election.

4. Consumer magazines can be divided … a number of categories.

5. What may cause … unemployment?

3. Look through the text once again and find the words and phrases which mean the following.

-to satisfy the needs

- a very important subject or problem

- to influence decisions

- the industry as a whole

-to study economy-wide phenomena

Talking Points

1. Imagine that your friend has got an opportunity to take one course in economics, so he has a choice between macroeconomics and microeconomics. Which course would be more interesting and useful? What would your advice be? Why?

Use the following expressions:

I think, I would… (Я думаю, я бы …)

He should perhaps …(Возможно, ему следует …)

In his position, I would … (На его месте я бы …)

2. Prepare to talk about the differences and similarities between macroeconomics and microeconomics. Complete the statements and share your opinions.

a) Microeconomics and macroeconomics are the fundamental tools to be learnt, in order to understand … .

b) While the two studies are different, they are interdependent, and together they … .

c) The main differences between … are … .

Summary Points

1. Skim the text once more and identify its main idea. Use the necessary vocabulary from Unit 1 Summary Points.

2. Make up a plan of the text about micro- and macroeconomics. Discuss it in pairs, then report to the whole group.

This text can be divided into … parts.	Текст можно разделить на … частей.
The text consists of … parts.	Текст состоит из … частей.
The first part is about … .	Первая часть текста – о …
The second (third, fourth) part describes (analyzes) … .	Вторая (третья, четвертая) часть описывает (анализирует) …

UNIT 3