Read the article and write down an abstract
THE FUNDAMENTAL PROBLEM OF ECONOMICS
Two fundamental facts provide a foundation for the field of economics and, in fact, comprise the economizing problem. The first fact is this: Society's material wants, that is the material wants of its citizens and institutions are unlimited. Second: Economic resources the means of producing goods and services - are limited or scarce. What do we mean by «material wants»? We mean the desires of consumers to obtain and use various goods and services. Innumerable products which we sometimes classify as necessities (food, shelter, clothing) and luxuries (perfumes, yachts, mink coats) satisfy human wants. Services satisfy our wants as much as do products. Repair jobs on our car, the removal of our appendix, a haircut, and legal advice have in common with goods the fact that they satisfy human wants. The differences between goods and services are often less than they seem to be at first.
Economic resources can be classified into the following categories: (1) property resources - land or raw materials and capital; (2) human resources - labor. Let us examine these various resource categories. What does the economist mean by land? Much more than do most people. Land refers to all natural resources - all «gifts of nature» - which are usable in the productive process. Such resources as arable land, forests, mineral and oil deposits, water resources come under this general classification. What about capital? Capital, or investment goods, refers to all manufactured aids to production, that is, all tools, machinery, equipment, and factory, storage, transportation and distribution facilities used in producing goods and services. It is a man-made resource. Economists often talk of «money capital», meaning money which is available for use in the purchase of machinery, equip-ment, and other productive facilities. But money, as such, produces nothing; hence, it is not to be considered as an economic resource. Real capital - tools, machinery, and other productive equipment - is an economic resource; money or financial capital is not. Besides, capital goods should be distinguished from consumer goods. The latter satisfy wants directly, whereas the former do so indirectly by facilitating the production of consumer goods. What is labor? Labor is a broad term which the economist uses in referring to all of the physical and mental talents of men and women which are usable in producing goods and services.
We must recognize that a variety of different institutional arrangements and coordinating mechanisms are used by a society in responding to the economizing problem. The industrially advanced economies of the world differ essentially on two grounds: (1) the ownership of the means of production, and (2) the method by which economic activity is coordinated and directed.
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Pure, or laissez faire, capitalism is characterized by the private ownership of resources and the use of a system of markets and prices to coordinate and direct economic activity. In such a system each participant is motivated by his or her own self interest; each economic unit seeks to maximize its income through individual decision making. The market system functions as a mechanism through which individual decisions and preferences are communicated and coordinated. The fact that goods and services are produced and resources are supplied under competitive conditions means there are many independently acting buyers and sellers of each product and resource. As a result, economic power is widely dispersed. Advocates of pure capitalism argue that such an economy promotes efficiency in the use of resources, output and employment stability, and rapid economic growth. The term laissez faire translates as «let it be», that is, keep the government from interfering with the economy. Government's role is limited to the protection of private prop-erty and establishing an appropriate legal framework to facilitate the functioning of free markets.
The polar alternative to pure capitalism is the command economy, characterized by public ownership of all property resources and collective determination of economic decisions through central economic planning. All major decisions concerning the level of resource use, the composition and distribution of output, and the organization of production are determined by a central planning board. Business firms are governmentally owned and produce according to state directives.
No country relies exclusively on the market mechanism to make its economic decisions. The United States and most other countries rely instead on the market for some decisions and on centralized decisions making (the government) for others. The use of both market signals and nonmarket directives is the hallmark of a mixed economy. The U.S. economy is distinguished by a heavy reliance on the market mechanism. The Swedish economy is also a hybrid system. Although over 90 percent of business activity is in private hands, government is deeply involved in achieving economic stability and in redistributing income. Other "mixed" economies include a heavier dose of government intervention.
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Task 7
10 points
A colleague of yours wants to rewrite their CV. Write some advice for him or her on how they should lay out their CV, and give reasons. Use the notes below to help you. Write about 120 words.
Name, address, nationality at top.
Work experience since leaving university. Latest job first.
Include details of job and responsibilities – why?
Education and qualifications– start with university.
Voluntary roles/positions of responsibility – why?
Additional skills – why? For example?
References – where? How many?
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