Lessons 10–11 · 2 lessons · E. Sariqov, B. Xaydarov. Fundamentals of Economic Knowledge (Economics), Grade 9, 4th edition. “Huquq va Jamiyat” publishing house, Tashkent, 2019
11
Review of Chapter I
Textbook: pp. 49–54
GoalReview the topics of Chapter I (entrepreneurship, types of firm, shares, setting up a firm, funds and costs, profit, analysis, management, marketing, ecology) and apply the formulas together.
Chapter I shows a firm’s whole life path: an idea and business plan, choosing the form of the firm (private firm, partnership, association firm, joint-stock company), the charter and founding agreement, and registration. Then funds (fixed and working), costs (TC = FC + VC, AC = TC : q), revenue and profit (TR = p · q, P = TR − TC) are calculated. In the analysis of activity, real profit P_r = P_n : I and efficiency R = P : TC · 100% are used; if the ability to pay is lost, the firm may go bankrupt. Management and marketing help the firm reach its goal, and ecological responsibility is its duty to society. In review it is important to say what each letter in a formula stands for and which topic it belongs to, and then to apply the formulas one after another in mixed problems. The percentage and tax rates in this chapter are conditional, for learning only.
Worked examples
A firm sold 4 000 units for 15 000 so‘m each in a month: TR = 60 000 000 so‘m. Fixed costs were 18 mln and variable 30 mln so‘m, so TC = 48 mln so‘m. Profit P = 60 − 48 = 12 mln so‘m, average cost AC = 48 000 000 : 4 000 = 12 000 so‘m, efficiency R = 12 : 48 · 100% = 25%.
Match the terms: 1) shirkat (partnership); 2) nominal value; 3) manager; 4) depreciation. Answer: 1 — a firm based on the property of two or more people whose members are fully liable; 2 — the price written on a share; 3 — a person with special management knowledge who runs the work; 4 — the part of a fixed asset’s price that has passed into the product’s price.
Class activity
“The firm’s path” game. The class splits into 8 groups; each explains one topic of Chapter I in one minute and asks classmates one question. A group that answers correctly earns a point. At the end the points are added and mistakes are discussed.
Practice
1
A firm sold 3 000 units at 25 000 so‘m each and its total cost was 60 mln so‘m. What is the profit in so‘m?
15000000
2
What is the efficiency of that firm in percent?
25
3
Link the following to the right type of firm: a) has one owner; b) liability limited to contributions; c) capital raised by selling shares.
a) private firm; b) MChJ (association firm); c) joint-stock company
4
Why are profit and efficiency more important to a firm’s owner than revenue? Explain with an example.
Revenue includes the money that goes to costs: 100 mln revenue with 95 mln costs gives 5 mln profit, whereas 50 mln revenue with 30 mln costs gives 20 mln profit and higher efficiency.