Lessons 11–12 · 2 lessons · E. Sariqov, B. Khaydarov. Foundations of Economics, Grade 8. “Huquq va Jamiyat” Publishing House, Tashkent, 2019
11
Market participants
Textbook: pp. 50–55
GoalExplains the market participants (producers, households, the state), their roles as buyers and sellers, the circulation of resources, goods and money, and market infrastructure.
New words
household: a family seen as a consumer in the economy · uy xo‘jaligiproducer: a firm or person creating goods and services · ishlab chiqaruvchimarket infrastructure: organisations that help the market work without trading directly · bozor infratuzilmasinon-cash payment: paying without cash, by card, transfer or mobile app · naqdsiz to‘lov
Explanation
There are three participants in the market: producers, consumers (households) and the state. A producer is a buyer when it buys resources in the market and a seller when it sells finished goods and services. A household is a buyer when it buys goods and services, and a seller when it sells its labour for wages or sells property. The state sells natural resources and the products of state firms, collects taxes from firms and people, and buys the goods and services it needs. As a result resources, goods, services and money circulate without stopping: households supply resources (labour) and receive income, pay for goods with that income, and firms use their revenue to buy resources again. The simplest scheme of a deal is: seller – good – money – buyer. Organisations that help the market without directly trading – banks, insurance companies, exchanges, customs, accounting and legal-advice services – make up the market infrastructure. Nowadays payments are increasingly made by plastic card and phone apps; in them secret codes must never be given to anyone.
Worked examples
A sewing factory is a buyer when it buys thread and fabric, a seller when it sells finished shirts, and also a buyer in the labour market when it pays wages. The workers' family sells its labour and buys food with the wages received.
A factory pays 30 workers 4 000 000 so‘m each per month: 30 · 4 000 000 = 120 000 000 so‘m. This money becomes income for households, which spend it on goods, and the money returns to firms – the circulation of money.
Class activity
“Circulation diagram”: three circles on the board (firms, households, the state) and two markets (resources, goods). Pupils draw arrows for the direction of money and goods.
Practice
1
Name the three market participants and write one action of each as a buyer and as a seller.
Producer: buys raw materials / sells products; household: buys food / sells labour; state: buys services / sells state property.
2
Which of these belong to market infrastructure: a bank, a bread shop, an insurance company, a farmer?
The bank and the insurance company.
3
A firm pays 25 workers 3 600 000 so‘m each per month. What is the total wage bill in so‘m?
90000000
4
Why can a household be called both a buyer and a seller?
Because it buys goods and services and, at the same time, sells its labour or property for income.