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(This passage was written in 1978.) Recent years have [#permalink]
31 Oct 2005, 14:26
(This passage was written in 1978.)
Recent years have brought minority-owned businesses in the United States unprecedented opportunitiesâ€”as well as new and significant risks. Civil rights activists have long argued that one of the principal reasons why Blacks, Hispanics, and other minority groups have difficulty establishing themselves in business is that they lack access to the sizable orders and subcontracts that are generated by large companies. Now Congress, in apparent agreement, has required by law that businesses awarded federal contracts of more than $500,000 do their best to find minority subcontractors and record their efforts to do so on forms filed with the government. Indeed, some federal and local agencies have gone so far as to set specific percentage goals for apportioning parts of public works contracts to minority enterprises.
Corporate response appears to have been substantial. According to figures collected in 1977, the total of corporate contracts with minority businesses rose from $77 million in 1972 to $1.1 billion in 1977. The projected total of corporate contracts with minority businesses for the early 1980â€™s is estimated to be over 53 billion per year with no letup anticipated in the next decade. Promising as it is for minority businesses, this increased patronage poses dangers for them, too. First, minority firms risk expanding too fast and overextending themselves financially, since most are small concerns and, unlike large businesses, they often need to make substantial investments in new plants, staff, equipment, and the like in order to perform work subcontracted to them. If, thereafter, their subcontracts are for some reason reduced, such firms can face potentially crippling fixed expenses. The world of corporate purchasing can be frustrating for small entrepreneurs who get requests for elaborate formal estimates and bids. Both consume valuable time and resources, and a small companyâ€™s efforts must soon result in orders, or both the morale and the financial health of the business will suffer.
A second risk is that White-owned companies may seek to cash in on the increasing apportionments through formation of joint ventures with minority-owned concerns. Of course, in many instances there are legitimate reasons for joint ventures; clearly, White and minority enterprises can team up to acquire business that neither could acquire alone. But civil rights groups and minority business owners have complained to Congress about minorities being set up as â€œfrontsâ€
Here is my responses. Must admit I took more than 10 mins for this.
B is close
describe a situation and its potential drawbacks
I didnt chose it as all author is talking about it "risks" NOT "drawbacks"
Others can be eliminated easily.
Specific question based on passage
small businesses might be overextended because they will have to buy alot of fixed assets. (para 2)
Others are not supported in passage.
B. passage just say they need to inform "on some forms"..does not say to WHICH govt agency.
D. passage says business grew from 77m to 1.1. but doe not say anything about how much "number of businesses" grew
Specific Question on passage
1st para supports ans choice C. (reqorded though)
Specific Question on passage
Inference question Last para
Inference Question Para 1
Indeed, some federal and local agencies have gone so far as to set specific percentage goals
If minority businesses were already close to 1b in 1970, there is no substantial improvement.
tough one. I could not find any sutaible ans for this