Pre-reading Activities

1. Consult a dictionary and find in the columns groups of synonyms and antonyms.

2. Translate in writing the following paragraph.

Scarcity is the fundamental economic problem: humans have unlimited wants and needs in a world of limited resources. It states that society has insufficient productive resources to satisfy all human wants and needs. Goods (and services) that are scarce are called economic goods (or simply goods). Other goods are called free goods if they are desired but in such abundance that they are not scarce, such as air and seawater.

Reading

Read the text and explain what the terms “scarcity” and “opportunity cost” mean.

Scarcity is the fundamental economic problem. Not all human needs and wants can be satisfied, scarcity limits us both as individuals and as a society. As individuals, we face scarcity of time and ability. As a society, our resources, land, labor, and capital, are insufficient to produce all the goods and services we might desire.

So, scarcity is the condition of not being able to have all of the goods and services a person wants. It exists because a society can only produce limited amounts of goods and services with the limited resources. The resources, however, have alternative uses and can be combined in various proportions. With the alternative use of scarce resources, choices must be made.

People must choose how to use scarce resources and which of their desires they will satisfy and which they will leave unsatisfied. When we, either as individuals or as a society, choose more of something, scarcity forces us to take less of something else.

Economics is sometimes called the study of scarcity because economic activity would not exist if scarcity did not force people to make choices. The fact that choices must be made reflects the fact that scarcity exists.

Scarcity is an imbalance between what is wanted and the amount that is freely available. Choice, in economic terms, is rational choice and is defined as an act of making calculated, self-interested decisions. Basically, this type of choice is about choosing what will cost the least and have the highest benefit.

In making a choice, some alternatives are forgone. Economists use the term ‘opportunity cost’ to mean the cost of a specific choice measured in terms of the next best alternative choice. In other words, it is what the decision-maker must forgo in order to make the choice that is finally made. Another term for opportunity cost is “real cost”. Opportunity cost is useful when evaluating the cost and benefit of choices. It is often expressed in non-monetary terms.

Не нашли, что искали? Воспользуйтесь поиском: