Complete each sentence with the correct ending, A-G, below.

1. Microeconomics deals with

2. Macroeconomics examines

3. Making reasonable simplifications of reality

4 Interactions in the entire economy are

5. In macroeconomic analysis consumer goods are

A. helps to keep the research manageable.

B. the behaviour of agents working within the economic system.

C. damage real facts completely.

D. fundamental problems within the economy.

E. considered as one group.

F. studied through a simplified analysis.

G. make sense for economists.

5. Complete the summary.

Choose NO MORE THAN THREE WORDS from the passage.

The 1 _______ of economic science can be classified according to the 2 __________ into microeconomics and macroeconomics. The former analyses the behaviour of individuals, households or firms and situations in the particular 3 ________. General equilibrium theory, studying every market for every 4 _________, provides the full 5 ________ of production, consumption and exchange in the economy. What 6 _______ the microeconomic analysis not very complicated is 7 ________ of economic processes. Ignoring consequences 8 ________ by economic phenomena makes the analysis partial. Macroeconomics deals with the economy as a whole without focusing on its particular agents. Here simplifications are also used so that an analysis can remain

9 _______.

UNIT 4/1 SUMMARY

1. Complete the summary using the list of words, A – N, below.

Economics is a 1 _______ science concerned with how resources are used to satisfy people’s wants. The science of economics arises from the need to overcome 2 ________. The resources available for production are not 3 _________ to satisfy all our wants. Consequently, we have to choose how best to use those resources. In deciding this, certain trade-offs are necessary. A production possibility frontier shows the trade-off between two 4 ___________ uses of a resource. The PPF points out the opportunity cost of producing more of one good by indicating the amount of the alternative good that is 5 __________.

Economics applies 6 __________ analysis based on economic principles to 7 ___________ events, 8 __________ outcomes, and recommend policies. Economic policies must take into 9 _______ an individual’s and a society’s 10 _________ judgements as well.

There are three basic types of economic systems and each resolves three key economic questions: what to produce; how to produce; for whom to produce in a different way. In a market economy, the interplay of buyers and sellers in many various markets provides answers to these questions. Markets are places for the 11 ___________ of goods and services. In a command economy, a centrally directed, the 12 __________office decides what will be produced, how it will be produced, and for whom it will be produced. Most economic systems today are actually mixed economies with elements of command and market economies.

1. LISTENING