Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized for You
we will pick new questions that match your level based on your Timer History
Track Your Progress
every week, we’ll send you an estimated GMAT score based on your performance
Practice Pays
we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:
For more than a decade, Target Test Prep has been helping GMAT students clear seemingly impossible hurdles and achieve MASSIVE score increases on test day. Our students prove time and time again that there is no “ceiling”...
Join us in a comprehensive talk about the F1 Student Visa process with Travis Feuerbacher, former U.S. Visa Officer and licensed U.S. immigration attorney having expertise working for the U.S. Department of State
Ready to skyrocket your career with an MBA? Get ahead with our curated list of FREE courses and resources to kickstart your journey into business education!
Are you ready to take your GMAT score to the next level? Join us for Episode 2 of our GMAT Study Strategy series where we focus on advanced strategies to increase your score by over 100 points!
Are you attending an MBA or Masters program outside in the US or Europe and wondering how to finance your studies? In this exclusive conversation, we discuss the collateral-free non-cosigner education loans...
Solve 30 high quality GMAT Focus practice questions in timed conditions. Take this GMAT practise test live with peers, analyze your GMAT study progress, and see where you stand in the GMAT student pool.
Do RC/MSR passages scare you? e-GMAT is conducting a masterclass to help you learn – Learn effective reading strategies, Tackle difficult RC & MSR with confidence, and Excel in timed test environment
Join us for an exclusive one-day event focused on mastering the GMAT and maximizing your preparation resources! Here's what you can expect: Don't miss out on this invaluable opportunity to supercharge your GMAT preparation journey.
Passage 9 Most economists in the united States seem
[#permalink]
11 Sep 2011, 23:17
Passage 9 Most economists in the united States seem captivated by the spell of the free market. Conse- quently, nothing seems good or normal that does not accord with the requirements of the free market. (5) A price that is determined by the seller or, for that matter, established by anyone other than the aggregate of consumers seems pernicious. Accord- ingly, it requires a major act of will to think of price-fixing (the determination of prices by the (10) seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the indus- trial system itself provides, as an effortless conse- quence of its own development, the price-fixing (15) that it requires. Modern industrial planning requires and rewards great size. Hence, a comparatively small number of large firms will be competing for the same group of consumers. That each large firm will act with consideration of (20) its own needs and thus avoid selling its products for more than its competitors charge is commonly recognized by advocates of free-market economic theories. But each large firm will also act with full consideration of the needs that it has in (25) common with the other large firms competing for the same customers. Each large firm will thus avoid significant price-cutting, because price- cutting would be prejudicial to the common interest in a stable demand for products. Most economists (30) do not see price-fixing when it occurs because they expect it to be brought about by a number of explicit agreements among large firms; it is not. Moreover, those economists who argue that allowing the free market to operate without inter- (35) ference is the most efficient method of establishing prices have not considered the economies of non- socialist countries other than the United states. These economies employ intentional price-fixing, usually in an overt fashion. Formal price-fixing (40) by cartel and informal price-fixing by agreements covering the members of an industry are common- place. Were there something peculiarly efficient about the free market and inefficient about price- fixing, the countries that have avoided the first (45) and used the second would have suffered drastically in their economic development. There is no indica- tion that they have. Socialist industry also works within a frame- work of controlled prices. In the early 1970’s, (50) the Soviet Union began to give firms and industries some of the flexibility in adjusting prices that a more informal evolution has accorded the capitalist system. Economists in the United States have hailed the change as a return to the free market. (55) But Soviet firms are no more subject to prices established by a free market over which they exercise little influence than are capitalist firms; rather, Soviet firms have been given the power to fix prices.
1. The primary purpose of the passage is to (A) refute the theory that the free market plays a useful role in the development of industrialized societies (B) suggest methods by which economists and members of the government of the United States can recognize and combat price-fixing by large firms (C) show that in industrialized societies price-fixing and the operation of the free market are not only compatible but also mutually beneficial (D) explain the various ways in which industrialized societies can fix prices in order to stabilize the free market (E) argue that price-fixing, in one form or another, is an inevitable part of and benefit to the economy of any industrialized society
2. The passage provides information that would answer which of the following questions about price-fixing? Ⅰ.What are some of the ways in which prices can be fixed? Ⅱ. For what products is price-fixing likely to be more profitable that the operation of the free market? Ⅲ.Is price-fixing more common in socialist industrialized societies or in nonsocialist industrialized societies? (A) Ⅰonly (B) Ⅲ only (C) Ⅰand Ⅱonly (D) Ⅱand Ⅲ only (E) Ⅰ,Ⅱ,and Ⅲ
3. The author’s attitude toward “Most economists in the United States”(line 1) can best be described as (A) spiteful and envious (B) scornful and denunciatory (C) critical and condescending (D) ambivalent but deferential (E) uncertain but interested
4. It can be inferred from the author’s argument that a price fixed by the seller “seems pernicious”(line 7) because (A) people do not have confidence in large firms (B) people do not expect the government to regulate prices (C) most economists believe that consumers as a group should determine prices (D) most economists associate fixed prices with communist and socialist economies (E) most economists believe that no one group should determine prices
5. The suggestion in the passage that price-fixing in industrialized societies is normal arises from the author’s statement that price-fixing is (A) a profitable result of economic development (B) an inevitable result of the industrial system (C) the result of a number of carefully organized decisions (D) a phenomenon common to industrialized and nonindustrialized societies (E) a phenomenon best achieved cooperatively by government and industry
Archived Topic
Hi there,
This topic has been closed and archived due to inactivity or violation of community quality standards. No more replies are possible here.
Still interested in this question? Check out the "Best Topics" block below for a better discussion on this exact question, as well as several more related questions.
Thank you for understanding, and happy exploring!
gmatclubot
Passage 9 Most economists in the united States seem [#permalink]