Uzbekistan’s path to a market economy. Chapter V review
Lessons 31–32 · 2 lessons · E. Sariqov, B. Khaydarov. Foundations of Economics, Grade 8. “Huquq va Jamiyat” Publishing House, Tashkent, 2019
32
Review of Chapter V
Textbook: pp. 132–134
GoalReviews the concepts of Chapter V (competition, market types, monopoly, market economy, mixed economy, transition) and applies them to practical situations.
New words
competition: rivalry between market participants · raqobatmonopoly: one seller and hard entry for others · monopoliyamarket economy: based on private property, free prices and competition · bozor iqtisodiyotimixed economy: market forces together with the state’s regulating and social role · aralash iqtisodiyot
Explanation
In Chapter V we studied competition, the basis of a market economy, and its opposite, monopoly. Competition benefits the buyer through price and quality, while unfair competition is forbidden. Markets are divided into pure competition, monopolistic competition, oligopoly and pure monopoly; natural monopolies are regulated by the state. A market economy relies on private property, free prices, the profit motive and competition, and a mixed economy reduces its flaws. Uzbekistan moved gradually from a centrally planned economy to a market economy based on five principles. In review, try to connect each concept to an example of your own.
Worked examples
Situation: a city has 12 pizza cafes whose pizzas are similar but not identical. This is a monopolistic competition market. One cafe lowered the price from 70 000 to 63 000 so‘m: price competition. The price fell by 70 000 – 63 000 = 7 000 so‘m, that is 10%.
Situation: a region has a single gas network. This is a natural monopoly, and the state regulates its price. If the network owner tried to worsen the service on purpose and raise the price, competition legislation and state supervision would restrict it.
Class activity
“Terms race”: the teacher reads a definition and the groups race to name the right term (competition, oligopoly, natural monopoly, mixed economy and so on).
Practice
1
Match each example to a market type: a) 20 cafes in a town; b) the only gas network in a region; c) three large mobile operators; d) 50 potato sellers at a farmers’ market.
a) monopolistic competition; b) natural monopoly; c) oligopoly; d) pure competition.
2
A product’s price fell from 80 000 to 72 000 so‘m. By what percent did it fall?
10
3
A shop sold 400 units at 72 000 so‘m each. What is the revenue in so‘m?
28800000
4
Why does the state regulate the prices of natural monopolies but not interfere in farmers’ market prices?
In a farmers’ market there is competition and the price forms from demand and supply; in a natural monopoly there is no competition, so buyers need protection.