Privatization

Question 1

What are ‘monopolies’?

Answer 1

One dominent seller in the market

Question 2

What is ‘privatization’?

Answer 2

it’s the act of selling a company or activity controlled by the government to private investors

Question 3

What does it mean to be ‘bankrupt’?

Answer 3

not having enough money to repay your debts

Question 4

What are ‘nationalized industries’?

Answer 4

public corporations previously part of the private sector that were taken into state ownership

Question 5

What are ‘natural monopolies’?

Answer 5

A situation that occurs when one firm in an industry can serve the entire market at a lower cost than would be possible if the industry were composed of many smaller firms

Question 6

What does it mean to be ‘accountable’?

Answer 6

being responsible for the effects of your actions and willing to explain or be criticized for them

Question 7

What’s an ‘incentive’?

Answer 7

It’s something that is used to encourage people to do something, especially to make them work harder, produce more, or spend more money

Question 8

What does it mean to be ‘diversified’?

Answer 8

if a company or economy diversifies, it increases the range of goods or services it produces

Question 9

What’s a ‘hostile takeover’?

Answer 9

it’s a takeover that the company being taken over does not want or agree to

Question 10

What are ‘takeovers’?

Answer 10

It’s the act of getting control of a company by buying 50% of its shares

Question 11

What is a ‘trade union’?

Answer 11

It’s an organization representing people working in a particular industry or profession that protects their rights

Question 12

Why does privatization take place?

Answer 12

Privatization takes place to generate income for the government, improve the efficiency of public sector organizations, and reduce political interference in business operations.

Question 13

How does privatization affect consumers?

Answer 13

It is hoped that consumers will benefit from privatization as businesses in the private sector are under pressure to meet consumer needs and return a profit for the owners, leading to efficiency and quality improvements

Question 14

How does privatization affect workers?

Answer 14

Privatization can lead to job losses and increased pressure on workers to raise their productivity and adopt more flexible working practices, which may weaken companies through the loss of experienced staff

Question 15

How does privatization affect businesses?

Answer 15

Once in the private sector, firms face competition and profit becomes an important objective, leading to increased investment, mergers, takeovers, and diversification into new areas.

Question 16

How does privatization affect the government?

Answer 16

Privatization generates revenue for the government but can be expensive, with criticisms of sales being conducted too cheaply and with excessive advertising costs. It allows the government to focus more on its core functions and avoid interference in business operations.

Question 17

What is the significance of natural monopolies in the context of privatization?

Answer 17

Natural monopolies occur when one firm in an industry can serve the entire market at a lower cost than would be possible if the industry were composed of many smaller firms. Privatization of such industries can lead to more efficient operations under private ownership.

Question 18

Describe contracting out in the context of privatization.

Answer 18

Contracting out involves allowing contractors to bid for services previously provided by the public sector, such as school meals and hospital cleaning

Question 19

What are the implications of privatization for trade unions?

Answer 19

Privatization may lead to job losses and changes in working conditions, affecting the role of trade unions in representing workers’ rights.