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Chapter 1 economics: the study of scarcity

1. Key terms – matching and translation.

Read aloud the key term and its definition so that they make up a single sentence. (Remember about the agreement between the subject and the predicate!). Translate the sentences you have arrived at from English into Russian.

Set 1

1 microeconomics	The simplest workable theory is the best theory.
2 Occam’s razor	Economic theory that is, at least theoretically, scientifically testable and free of value judgments.
3 positive economics	Securities and other paper claims to goods or resources.
4 land	The organizing, risk-taking, and innovating resource.
5 model	Contestable theories rife with value judgments.
6 normative economics	Using technology to apply energy to make materials more valuable.
7 macroeconomics	Nonhuman resources other than capital.
8 entrepreneurship	The study of individual decisions made by consumers and firms.
9 financial capital	Focuses on aggregate, or economy-wide, variables.
10 production	A representation of a theory.

Set 2

1 technology	Desired amounts of a good exceed those freely available.
2 capital	Improvements to natural resources that make them more productive.
3 Homo economicus	The view that humans maximize their satisfaction or wealth.
4 labor	The hours of human effort available for production.
5 rent	Payments for labor services.
6 scarce good	Physical capital accumulation.
7 profits	Decreases in capital because of wear-and-tear.
8 investment	Entrepreneur's reward.
9 depreciation	Payment for the use of land.
10 wages	The "recipes" used to combine resources for production.

Set 3

1 interest	The value foregone whenever people make choices.
2 free good	Adds to human happiness, but is not scarce. Payments to capital owners.
3 opportunity cost	When this is reached, further gains in happiness to anyone require losses to someone else.
4 scarcity	Achieving maximum satisfaction from given budgets.
5 relative prices	The basic economic problem.
6 economic efficiency	Prices of goods or resources in terms of each other. Prices of goods or services in terms of some monetary unit.
7 absolute prices	Fairness.
8 production efficiency	Getting maximum output from given resources.
equity consumption efficiency