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Answers are in bold.

1. The author would most likely agree with government subsidies beyond the required minimum for which of the following companies:

A. a steel manufacturing plant that cannot remain profitable without infrastructure improvement and higher steel prices.
B. a bus company that services remote towns in which many deprived people live and that cannot be profitable without subsidies.
C. a train company that services many affluent summer communities and will stop service without appropriate subsidies.
D. a bio-medical company that will make an important vaccines for rare diseases but needs access to start-up money.
E. an airline that services the major U.S. markets but is failing to compete with its rivals, some of which operate in the Essential Air Service program.

Explanation of question 1:
With these types of questions first we need to ascertain the author's tone. Is the author agreeing to the some sort of subsidy for the public transport. Yes he is. How much? Well he says at least some, but the degree might change on a case to case basis. Great, now we understand what the author's take on the this is. All we have to now do is go over the choices and match the option which matches our understanding. We can easily eliminate A, C and E.
However, the choice between B and D is slightly tricky.
B says exactly what is stated in the passage except now it is a bus company (instead of airline). Great, its serving the remote communities, but obviously not profitable. So must rely on govt subsidy. Lets keep this.
D says this bio-tech company, although would work on vaccines, and will help the community, it needs start-up money. So once it is up and running, probably it would be self sufficient - unlike the bus route which would need constant govt subsidies. D is out.
B is our answer.



2. All of the following can be properly inferred from the passage EXCEPT:

A. A majority of public transportation systems are better under privatization than they were under government control.
B. Some public transportation systems in the U.S. can be run without subsidies.
C. Most observers agree that there should be some degree of government subsidy in public transportation.
D. Most public transportation systems were under government control in the 60’s and 70’s.
E. Many Essential Air Service flights are on unprofitable routes in rural states.

Explanation of question 2:
Now these type of questions we will use the POE technique. Lets start.
We can eliminate A, C D and E easily.
In brief, A because author is an advocate of privatisation;
C because it is stated in the passage " the question among most observers is not whether public transportation should be subsidized";
D because it is stated in the passage " in the 60’s and 70’s when most public transportation systems were under full government control";
E because it is stated in the passage "in markets where there is no economic incentive for airlines to fly, the government has instituted a program called Essential Air Service";
Only B remains. Also B is wrong, the author says that you NEED some sort of subsidy. Hence B is our answer.



3. The author’s highlighted statement at the end of the passage assumes which of the following:

A. The Essential Air Service program is not drastically different than the government airline programs in the 60’s and 70’s.
B. Government subsidy programs have not improved dramatically since the 60’s and 70’s.
C. Public transportation systems are not better today than they were in the 60’s and 70’s.
D. The Essential Air Service program is not going to change dramatically and remove some of the most inefficient routes.
E. The need for the Essential Air Service program has not increased dramatically over the past few years.

Explanation of question 3:
A quick summary of what is written in the highlighted part - basically the author says in the 60's and 70's most public transport was under govt control and it wasted money. The current Essential Air Service (EAS) can be compared to it.
Since Essential Air Service and 60's public transport can be compared with each other, it can be said that it is not drastically different. That is what A says. Lets keep this in.
B - well we do not know. In either case, this is not a comparison of EAS and 60's transport. Out.
C - this is not the intended meaning. Refer to the quick summary we just made.
D - probably it is not going to change, but again not what the highlighted part means.
E - this is completely irrelevant. Whether it has improved or not is not the intended meaning, the meaning is both are equally bad.