Lessons 1 · 1 lessons · E. Sariqov, B. Khaydarov. Foundations of Economics, Grade 8. “Huquq va Jamiyat” Publishing House, Tashkent, 2019
1
Introduction to economics
Textbook: pp. 8–11
GoalKnows the parts of an economy, the four stages of the economic process and what the science of economics studies; explains with examples why economic knowledge is needed in everyday life.
New words
economy: the system of activities that produce, distribute and consume goods · iqtisodiyoteconomic process: production, distribution, exchange and consumption · iqtisodiy jarayonmicroeconomics: the economics of a single family, firm or industry · mikroiqtisodiyotmacroeconomics: the economics of a whole country or of the world · makroiqtisodiyot
Explanation
The economy is the system of activities aimed at producing, distributing and consuming the goods that satisfy people's needs. It has three parts: people (who work and take decisions), nature (the storehouse of raw materials) and the things people have built – buildings, factories, roads, machines and equipment. When these parts combine, the economic process takes place, and it passes through four stages: production, distribution, exchange and consumption. The word “economy” comes from the ancient Greek “oikonomikos”, “the art of running a household”; a book of that name was written by Xenophon, who lived in the 5th–4th centuries BC. Today economics studies running an economy from a single family to the whole world and is divided into two branches: microeconomics and macroeconomics. Economic knowledge will help you whichever profession you choose – doctor, teacher or entrepreneur.
Worked examples
Four stages in the case of bread: a farmer grows wheat, a mill grinds flour, a bakery bakes bread (production); the bread is delivered to shops (distribution); a customer pays and buys it (exchange); a family eats it (consumption).
“How many loaves does the bakery in our neighbourhood bake per day?” is a microeconomic question, because it is about one firm. “By how much did prices rise on average in the country in a year?” is a macroeconomic question, because it is about the whole country.
Class activity
“My breakfast”: each pupil draws in a notebook the path of one breakfast product through the four stages and explains it to a partner.
Practice
1
Name the three parts of an economy and give one example of each.
People (a worker, a farmer); nature (land, water, oil); things made by people (a factory, a road, a tractor).
2
Which stages of the economic process might a notebook sold in a shop have passed through? Write them in order.
Production (paper and the notebook are made), distribution (it is delivered to the shop), exchange (a customer buys it), consumption (a pupil writes in it).
3
Which question belongs to microeconomics and which to macroeconomics? a) How much money does our family spend in a month? b) How much in total did the country produce in a year?
a) microeconomics (one family); b) macroeconomics (the whole country).
4
Why were people forced to create an economy? Explain.
Because bread, clothes and housing do not exist ready-made in nature; people have to create them by their own work.