{"id":186,"date":"2014-12-07T21:08:29","date_gmt":"2014-12-07T18:08:29","guid":{"rendered":"http:\/\/wikienglish.ru\/?p=186"},"modified":"2015-04-11T13:55:08","modified_gmt":"2015-04-11T10:55:08","slug":"basic-economic-problem-scarcity-choice","status":"publish","type":"post","link":"https:\/\/wikienglish.ru\/?p=186","title":{"rendered":"Basic Economic Problem &#8212; Scarcity &#038; Choice"},"content":{"rendered":"<p><center><br \/>\n<script src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\" async=\"\"><\/script><!-- wikienglish-336x280 --> <ins class=\"adsbygoogle\" style=\"display: inline-block; width: 336px; height: 280px;\" data-ad-client=\"ca-pub-8601407773370768\" data-ad-slot=\"2337960491\"><\/ins><script>\/\/ <![CDATA[\n(adsbygoogle = window.adsbygoogle || []).push({});\n\/\/ ]]><\/script><br \/>\n<\/center><\/p>\n<h3>Vocabulary<\/h3>\n<p><strong>Human<\/strong> <strong>Development<\/strong> <strong>Index<\/strong> \u0418\u043d\u0434\u0435\u043a\u0441 \u0440\u0430\u0437\u0432\u0438\u0442\u0438\u044f \u0447\u0435\u043b\u043e\u0432\u0435\u0447\u0435\u0441\u043a\u043e\u0433\u043e \u043f\u043e\u0442\u0435\u043d\u0446\u0438\u0430\u043b\u0430<\/p>\n<p><strong>trade<\/strong><strong>(-)<\/strong><strong>off<\/strong> 1) \u043a\u043e\u043c\u043f\u0440\u043e\u043c\u0438\u0441\u0441 2) \u0430\u043b\u044c\u0442\u0435\u0440\u043d\u0430\u0442\u0438\u0432\u0430 3) \u0432\u044b\u0431\u043e\u0440 4) \u043e\u0431\u043c\u0435\u043d, \u0432\u0437\u0430\u0438\u043c\u043e\u0437\u0430\u043c\u0435\u043d\u044f\u0435\u043c\u043e\u0441\u0442\u044c<\/p>\n<p><strong>marginal cost <\/strong>\u043f\u0440\u0435\u0434\u0435\u043b\u044c\u043d\u044b\u0435 \u0437\u0430\u0442\u0440\u0430\u0442\u044b (\u0438\u0437\u043c\u0435\u043d\u0435\u043d\u0438\u0435 \u043e\u0431\u0449\u0438\u0445 \u0437\u0430\u0442\u0440\u0430\u0442, \u043d\u0435\u043e\u0431\u0445\u043e\u0434\u0438\u043c\u043e\u0435 \u0434\u043b\u044f \u043f\u0440\u043e\u0438\u0437\u0432\u043e\u0434\u0441\u0442\u0432\u0430 \u0435\u0434\u0438\u043d\u0438\u0446\u044b \u0434\u043e\u043f\u043e\u043b\u043d\u0438\u0442\u0435\u043b\u044c\u043d\u043e\u0433\u043e \u0432\u044b\u043f\u0443\u0441\u043a\u0430) &#8212; the cost added by producing one extra item of a product<\/p>\n<p><strong>marginal benefit <\/strong>\u043f\u0440\u0435\u0434\u0435\u043b\u044c\u043d\u0430\u044f \u0432\u044b\u0433\u043e\u0434\u0430<\/p>\n<p>&nbsp;<\/p>\n<h2>Basic Economic Problem &#8212; Scarcity &amp; Choice<\/h2>\n<p><em>Author: Geoff Riley | Sunday 23 September, 2012<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>The Economist&#8217;s Dictionary of Economics defines economics as &#171;The study of the production, distribution and consumption of wealth in human society&#187;<\/p>\n<p><strong>The purpose of economic activity<\/strong><\/p>\n<p>It is often said that the central purpose of economic activity is the production of goods and services to satisfy our ever-changing needs and wants.<\/p>\n<p>The basic economic problem is about scarcity and choice. Every society has to decide:<\/p>\n<ul>\n<li><strong>What goods and services to produce?\u00a0<\/strong>Does the economy use its resources to build more hospitals, roads, schools or luxury hotels? Do we make more iPhones and iPads or double-espressos?<\/li>\n<li><strong>How best to produce goods and services?\u00a0<\/strong>What is the best use of our scarce resources? Should school playing fields be sold off to provide more land for affordable housing? Should we subsidise the purchase of solar panels for roofs?<\/li>\n<li><strong>Who is to receive goods and services?\u00a0<\/strong>Who will get expensive hospital treatment &#8212; and who not? Should there be a minimum wage? Or perhaps a living wage? What are the causes and consequences of poverty in societies across the globe?<\/li>\n<\/ul>\n<p><strong>Scarcity<\/strong><\/p>\n<p>We are always uncovering of new wants and needs which producers attempt to supply by using factors of production. For a perspective on the achievements of countries in meeting people\u2019s basic needs, the Human Development Index produced by the United Nations is worth reading. The economist Amartya Sen (Winner of the 1998 Nobel Prize for Economics) has written extensively on this issue.<\/p>\n<p><strong style=\"font-size: 13px;\">Scarcity means we all have to make choices<\/strong><\/p>\n<p>Because of scarcity,\u00a0<strong>choices<\/strong>\u00a0must be made by consumers, businesses and governments. For example, over six million people travel into London each day and they make decisions about when to travel, whether to use the bus, the tube, to walk or cycle or work from home. Millions of decisions are taken, many of them are habitual \u2013 but somehow on most days, people get to work on time and they get home too in safety if not in comfort!<\/p>\n<p><strong>Key Point: Trade-offs and Choices<\/strong><\/p>\n<p>Making a\u00a0<strong>choice<\/strong>\u00a0normally involves a\u00a0<strong>trade-off<\/strong>\u00a0\u2013 this means that choosing more of one thing can only be achieved by giving up something else in exchange.<\/p>\n<p><em>\u201cEvery purchase is a trade-off, of course. If you decide to spend $20,000 on a new car, you\u2019re saying that\u2019s worth more to you than 20 bicycles or four vacations to Europe or the down payment on a house. Every choice involves opportunity costs; when you choose one thing, you\u2019re giving up others. Plus, what you\u2019re giving up isn\u2019t always financial or obvious.\u201d<\/em><\/p>\n<ol>\n<li><strong>Housing:\u00a0<\/strong>Choices about whether to rent or buy a home \u2013 both decisions involve\u00a0<strong>risk<\/strong>. People have to weigh up the\u00a0<strong>costs<\/strong>\u00a0and\u00a0<strong>benefits<\/strong>\u00a0of the decision.<\/li>\n<li><strong>Working:\u00a0<\/strong>Do you work full-time or part-time? Is it worth your while studying for a degree? How have these choices been affected by the introduction of university tuition fees?<\/li>\n<li><strong>Transport and travel:\u00a0<\/strong>The choice between using Euro-Tunnel, a low-cost ferry or an airline when travelling to Western Europe.<\/li>\n<\/ol>\n<p><strong>Key Point: The Cost Benefit Principle<\/strong><\/p>\n<ul>\n<li>In many decisions where people consider the\u00a0<strong>costs<\/strong>\u00a0and\u00a0<strong>benefits<\/strong><strong>\u00a0<\/strong>of their actions \u2013 economists make use of the\u00a0<strong>\u2018marginal\u2019 idea<\/strong>, for example what are the benefits of consuming\u00a0a little extra\u00a0of a product and what are the costs?<\/li>\n<li><strong>Rational decision-makers\u00a0<\/strong>weigh the marginal benefit one receives from an option with its marginal cost, including the opportunity cost.<\/li>\n<li>But keep in mind that behavioural economics questions the rationality of many of our decisions!<\/li>\n<\/ul>\n<p><em>\u0410\u043d\u0433\u043b\u043e\u044f\u0437\u044b\u0447\u043d\u044b\u0439 \u0438\u0441\u0442\u043e\u0447\u043d\u0438\u043a:\u00a0<a href=\"http:\/\/tutor2u.net\/economics\/revision-notes\/as-markets-scarcity-and-choice.html\" rel=\"nofollow\">tutor2u.net<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Vocabulary Human Development Index \u0418\u043d\u0434\u0435\u043a\u0441 \u0440\u0430\u0437\u0432\u0438\u0442\u0438\u044f \u0447\u0435\u043b\u043e\u0432\u0435\u0447\u0435\u0441\u043a\u043e\u0433\u043e \u043f\u043e\u0442\u0435\u043d\u0446\u0438\u0430\u043b\u0430 trade(-)off 1) \u043a\u043e\u043c\u043f\u0440\u043e\u043c\u0438\u0441\u0441 2) \u0430\u043b\u044c\u0442\u0435\u0440\u043d\u0430\u0442\u0438\u0432\u0430 3) \u0432\u044b\u0431\u043e\u0440 4) \u043e\u0431\u043c\u0435\u043d, \u0432\u0437\u0430\u0438\u043c\u043e\u0437\u0430\u043c\u0435\u043d\u044f\u0435\u043c\u043e\u0441\u0442\u044c marginal cost \u043f\u0440\u0435\u0434\u0435\u043b\u044c\u043d\u044b\u0435 \u0437\u0430\u0442\u0440\u0430\u0442\u044b (\u0438\u0437\u043c\u0435\u043d\u0435\u043d\u0438\u0435 \u043e\u0431\u0449\u0438\u0445 \u0437\u0430\u0442\u0440\u0430\u0442, \u043d\u0435\u043e\u0431\u0445\u043e\u0434\u0438\u043c\u043e\u0435 \u0434\u043b\u044f \u043f\u0440\u043e\u0438\u0437\u0432\u043e\u0434\u0441\u0442\u0432\u0430 \u0435\u0434\u0438\u043d\u0438\u0446\u044b \u0434\u043e\u043f\u043e\u043b\u043d\u0438\u0442\u0435\u043b\u044c\u043d\u043e\u0433\u043e \u0432\u044b\u043f\u0443\u0441\u043a\u0430) &#8212; the cost added by producing one extra item&#8230;<br \/><a class=\"read-more-button\" href=\"https:\/\/wikienglish.ru\/?p=186\">\u0414\u0410\u041b\u0415\u0415<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/wikienglish.ru\/index.php?rest_route=\/wp\/v2\/posts\/186"}],"collection":[{"href":"https:\/\/wikienglish.ru\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wikienglish.ru\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wikienglish.ru\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wikienglish.ru\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=186"}],"version-history":[{"count":6,"href":"https:\/\/wikienglish.ru\/index.php?rest_route=\/wp\/v2\/posts\/186\/revisions"}],"predecessor-version":[{"id":517,"href":"https:\/\/wikienglish.ru\/index.php?rest_route=\/wp\/v2\/posts\/186\/revisions\/517"}],"wp:attachment":[{"href":"https:\/\/wikienglish.ru\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wikienglish.ru\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wikienglish.ru\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}