II. Say whether these statements are true or false and if they are

false say why:

1. Free competition and large numbers of sellers are always available in the real world. 2. Monopoly describes a market in which there is only one seller or a very limited number of sellers. 3. In economic theory there are four kinds of monopoly. 4. States always monopolize important basic commodities. 5. Egyptian nickel is a good example of natural monopoly. 6. Cornering the market is quite legal in the USA. 7. The Monopolies Commission consider that it is undesirable to restrict business mergers.

III. Change the following sentences as in the pattern:

Pattern: In some markets there may only be one seller.

A situation like this is called a monopoly.

A situation of this kind is called a monopoly.

1. In some countries there are both private and public sectors. An economic system like this is known as a mixed economy. 2. In some countries production is a matter of private enterprise. A situation like this is called capitalism. 3. For some people investment in new business enterprises is not too great a risk. People like these sometimes make considerable profits but on other occasions can lose much of their capital. 4. In most markets it isn’t necessary for buyers and sellers to meet in particular localities. Markets like these are quite different from the marketplaces of ancient towns.

4. Define which of the following items best completes

the statement:

1. Monopolies are permitted in public utilities because in these industries

a. regulation is relatively easy.

b. competition might be harmful to the public interest.

c. utilities receive financial assistance from the government.

d. utilities are very large firms.

2. Which of the following firms will have the greatest freedom in

setting the price of its products?

a. One of three companies in an industry.

b. The only producer of a product with many substitutes.

c. The only producer of a product with no substitutes.

d. One of 300 firms in an industry.

3. A merger results when

a. two or more firms combine to form a single corporation.

b. a firm undergoes vast, internal expansion.

c. the stock of a corporation is traded on several stock exchanges.

d. a large firm goes out of business.

V. Punctuate the following passage. Provide capital letters,

commas, full stops, brackets, colons etc., where applicable:

monopolies and similar arrangements may be referred in britain to the monopolies commission between 1948 and 1966 the commission presented some twenty six reports the government in 1965 passed a special act called the monopolies and mergers act which reorganized and enlarged the monopolies commission it provides for the investigation of services and mergers especially newspaper mergers and improves and extends the governments powers for taking action the action of the government is based on the monopolies commissions reports

VI. Answer the following questions:

1. What is a monopoly? 2. What are the first three kinds of monopoly? 3. What examples of important state monopolies are given? 4. What monopoly are Canadian nickel and the Suez Canal examples of? 5. What are certain inventors permitted by law to have? 6. What word in the last paragraph shows that the fourth type of monopoly is quite distinct from the other three? 7. What happens when certain companies obtain complete control over particular commodities? 8. What do the Americans call their anti-monopoly laws? 9. What does Britain use to restrict special arrangements?