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Test: Reading Comprehension- 1 - GRE MCQ


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Test: Reading Comprehension- 1 - Question 1

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.
Q. The primary purpose of the passage is to

Detailed Solution for Test: Reading Comprehension- 1 - Question 1

The passage argues against the belief that the free market is essential for the development of industrialised societies. Key points include:

  • Many economists view the free market as the ideal model for price determination.
  • Price-fixing, where sellers set prices, is seen as negative but is actually common in industrialised nations.
  • Large firms, competing for the same customers, tend to avoid significant price cuts to maintain stable demand.
  • Price-fixing occurs without formal agreements and is often overlooked by economists who focus only on explicit collusion.
  • Non-socialist economies, outside of the US, also use intentional price-fixing, which does not hinder their economic development.
  • Socialist economies, like the Soviet Union in the 1970s, also controlled prices, challenging the notion that only free markets are efficient.

Overall, the text suggests that price-fixing is an integral aspect of any industrial economy, rather than a hindrance.

Test: Reading Comprehension- 1 - Question 2

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.

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 than the operation of the free market?
III.Is price-fixing more common in socialist industrialized societies or in nonsocialist industrialized societies?

 

Detailed Solution for Test: Reading Comprehension- 1 - Question 2

Many economists in the United States are strongly influenced by the idea of the free market. As a result, they often view anything that does not align with free-market principles as unusual or undesirable.

When a seller sets prices, rather than allowing them to be determined by the collective actions of consumers, it is often seen as harmful. This perspective makes it difficult for some to accept price-fixing (where sellers set prices) as both normal and economically beneficial. In reality, price-fixing occurs in all industrialised societies due to the nature of industrial systems. These systems naturally lead to price-setting as they develop.

Modern industrial planning favours and rewards larger firms. Consequently, a small number of large companies compete for the same customers. Each firm typically avoids pricing its products significantly higher than its competitors. However, they also consider their shared interests, which leads them to refrain from drastic price cuts. This is because such actions could harm the overall demand for their products. Many economists overlook price-fixing because they expect it to arise from explicit agreements between firms, which is not always the case.

Furthermore, economists who advocate for a completely free market as the best way to set prices often neglect to examine the economies of non-socialist countries outside the United States. These economies frequently engage in intentional price-fixing, both through formal cartels and informal agreements within industries. If the free market were inherently more efficient than price-fixing, countries that relied on price-fixing would likely have suffered economic setbacks, which is not evident.

Even in socialist economies, price control is common. In the early 1970s, the Soviet Union began allowing firms more flexibility in price adjustments, akin to the informal evolution seen in capitalist systems. However, Soviet firms are not subject to free-market prices any more than capitalist firms are.

Test: Reading Comprehension- 1 - Question 3

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.


Q. The author’s attitude toward “Most economists in the United States” can best be described as

Detailed Solution for Test: Reading Comprehension- 1 - Question 3

Many economists in the United States seem to be under the spell of the free market. As a result, anything that does not align with the principles of the free market is often viewed as abnormal.

A price set by the seller, or anyone other than the overall consumers, is seen as harmful. It takes a significant effort to view price-fixing—where sellers determine prices—as both normal and economically beneficial. In truth, price-fixing is common in all industrialised societies because the industrial system naturally leads to it.

  • Modern industrial planning favours large companies, resulting in a few big firms competing for the same customers.
  • These large firms consider their own needs and avoid pricing their products significantly above competitors.
  • However, they also take into account their shared interests and thus refrain from aggressive price cuts to maintain stable demand.

Most economists overlook price-fixing because they expect it to arise from explicit agreements among large firms, which is not the case.

Furthermore, those who advocate for a completely free market as the most efficient way to set prices often ignore the experiences of non-socialist countries outside the United States. These economies frequently engage in intentional price-fixing, both formally and informally.

  • If the free market were uniquely efficient and price-fixing ineffective, countries that have relied on the latter would have suffered economically, but this is not evident.

Even socialist industries operate under a system of controlled prices. In the early 1970s, the Soviet Union began allowing some flexibility in price adjustments, similar to developments in capitalist countries. However, Soviet firms are not governed more by free market prices than capitalist firms are.

Test: Reading Comprehension- 1 - Question 4

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.

Q. It can be inferred from the author’s argument that a price fixed by the seller “seems pernicious” because

Detailed Solution for Test: Reading Comprehension- 1 - Question 4

Most economists in the United States seem captivated by the allure of the free market. As a result, anything that does not align with its principles appears abnormal.

A price set by the seller, or anyone other than the overall consumer base, is often viewed as harmful. It takes a considerable effort to consider price-fixing (where prices are set by the seller) as both “normal” and economically beneficial. In reality, price-fixing is standard in all industrialised societies because the industrial system itself leads to this practice as a natural outcome of its development.

Modern industrial planning values size and efficiency. Consequently, a small number of large firms compete for the same set of consumers. It is widely accepted that each firm aims to avoid charging more than competitors. However, these firms also consider their shared interests with others in the market, leading to minimal price reductions to maintain stable demand.

Many economists overlook price-fixing because they believe it results from explicit agreements among large firms, which is often not the case.

Moreover, those who advocate for a completely unregulated free market fail to account for the economies of non-socialist countries outside the United States. These nations often engage in intentional price-fixing, both formally through cartels and informally through industry agreements. If the free market were inherently efficient and price-fixing inefficient, we would expect countries that avoid free market principles to suffer economically, which is not evident.

Socialist industries also operate within a framework of controlled prices. In the early 1970s, the Soviet Union started giving firms more flexibility in setting prices, similar to the informal adjustments seen in capitalist systems. Economists in the United States viewed this as a shift back to a free market. However, Soviet firms were not subject to prices determined by the free market any more than their capitalist counterparts.

Test: Reading Comprehension- 1 - Question 5

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.


Q. The suggestion in the passage that price-fixing in industrialized societies is normal arises from the author’s statement that price-fixing is​

Detailed Solution for Test: Reading Comprehension- 1 - Question 5

Price-fixing in industrialized societies is described as normal because:

  • It is an inevitable result of the industrial system's development.
  • The industrial system naturally leads to a small number of large firms competing for the same consumers.
  • These firms tend to avoid significant price cuts to maintain a stable market demand.
  • Many economists overlook price-fixing as it often occurs without explicit agreements.

Furthermore, economies outside the United States also implement price-fixing, both formally and informally, showing that:

  • Countries that use price-fixing have not suffered economically compared to those relying solely on free markets.
  • Even socialist systems operate with controlled prices.

In summary, price-fixing is a common and expected practice in industrialized economies.

Test: Reading Comprehension- 1 - Question 6

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.

Q. According to the author, priced-fixing in nonsocialist countries is often.

Detailed Solution for Test: Reading Comprehension- 1 - Question 6

According to the passage, the correct answer is 5) intentional and widespread. The passage states that in non-socialist countries, intentional price-fixing is common and can be done formally through cartels or informally through agreements among industry members.

Test: Reading Comprehension- 1 - Question 7

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.

Q. According to the author, what is the result of the Soviet Union’s change in economic policy in the 1970’s?

Detailed Solution for Test: Reading Comprehension- 1 - Question 7

The author discusses how the Soviet Union, in the 1970s, began giving firms and industries some flexibility in adjusting prices. This change is described as providing Soviet firms with the ability to adjust prices more informally, similar to what capitalist firms do. However, the passage also clarifies that Soviet firms, like capitalist firms, are not subject to prices established by the free market over which they exercise little control.

This suggests that Soviet firms were granted some authority to fix prices, though not completely in a free-market manner. The shift allowed for more flexibility, but Soviet firms did not operate fully under free-market conditions.

Option A (Soviet firms show greater profit) is not mentioned in the passage.

Option B (Soviet firms have less control over the free market) is not correct, as the passage indicates that Soviet firms gained more flexibility, not less.

Option C (Soviet firms are able to abject to technological advances) is not discussed in the passage.

Option E (Soviet firms are more responsive to the free market) is not correct because the passage does not suggest that Soviet firms became entirely responsive to the free market.

Thus, D: Soviet firms have some authority to fix prices is the most accurate answer based on the passage.

Test: Reading Comprehension- 1 - Question 8

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.

Q. With which of the following statements regarding the behavior of large firms in industrialized societies would the author be most likely to agree.

Detailed Solution for Test: Reading Comprehension- 1 - Question 8

In the passage, the author discusses how large firms in industrialized societies are concerned with maintaining stable demand for their products. The passage highlights how firms tend to avoid significant price cutting because it could be harmful to the common interest in a stable demand for products. This implies that the directors of large firms are concerned with predicting and maintaining demand, rather than focusing on other goals such as maximizing profits or reducing costs in the way other options suggest.

Option A: fits because anticipating demand is crucial for maintaining stable prices and ensuring long-term profitability, which aligns with the author's discussion of firms’ behavior.

Option B: doesn't align with the passage's focus on stable demand and avoids the issue of price cutting that would harm long-term interests.

Option C: is not emphasized in the passage, which instead focuses on price stability and market behavior.

Option D: is not mentioned; the passage does not discuss government-established prices for products.

Option E: is not supported by the passage, as it focuses on the stability of demand rather than annual price increases.

Thus, A: The directors of large firms will continue to anticipate the demand for products is the best match with the author's point of view.

Test: Reading Comprehension- 1 - Question 9

PASSAGE: Most economists in the United States seem captivated by the spell of the free market.  Consequently, nothing seems good or normal that does not accord with the requirements of the free market.

 A price that is determined by the seller or for that matter, established by anyone other than the aggregate of consumers seems pernicious, Accordingly, it requires a major act of will to think of price–fixing (the determination of prices by the seller) as both “normal” and having a valuable economic function. In fact, price-fixing is normal in all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixing that 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 its own needs and thus avoid selling its products for more than its competitors charge is commonly recognised by advocates of free-market economic theories.  But each large firm will also act with full consideration of the needs that it has in 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 do not see price-fixing when it occurs because they expect it to be brought about by several explicit agreements among large firms; it is not.

 Moreover, those economists who argue that allowing the free market to operate without interference 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 by cartels and informal price fixing by agreements covering the members of an industry are commonplace.  Were there something peculiarly efficient about the free market and inefficient about price fixing, the countries that have avoided the former and used the latter would have suffered drastically in their economic development? There is no indication that they have.

 Socialist industry also works within a framework of controlled prices.  In the early 1970s, 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. But Soviet firms are no more subject to prices established by the free market over which they exercise little influence than are capitalist firms.

Q. In the passage, the author is primarily concerned with 

Detailed Solution for Test: Reading Comprehension- 1 - Question 9

The author primarily discusses the limitations of the free market perspective held by many economists in the United States. Key points include:

  • The belief that free market operations are the only valid method for price determination.
  • Price-fixing by sellers is often viewed as unusual and detrimental, yet it is common in industrialised societies.
  • Large firms tend to avoid significant price cuts to maintain stable demand, which is a form of implicit price-fixing.
  • Many economists overlook price-fixing unless it results from explicit agreements among firms.
  • Countries with controlled pricing systems have not necessarily suffered economically, challenging the idea that free markets are inherently superior.
  • Even within socialist economies, price control mechanisms exist, similar to those in capitalist systems.

Overall, the author critiques the notion that free market pricing is the most efficient method, highlighting the complexities of pricing strategies across different economic systems.

Test: Reading Comprehension- 1 - Question 10

PASSAGE: The discoveries of the white dwarf, the neutron star, and the black hole, coming well after the discovery of the red giant, are among eh most exciting developments in decades because they may be well present physicists with their greatest challenge since the failure of classical mechanics.  In the life cycle of the star, after all of the hydrogen and helium fuel has been burned, the delicate balance between the outer nuclear radiation. Pressure and the stable gravitational force become disturbed, and slow contraction begins.  As compression increases, a very dense plasma forms.  If the initial star had a mass of less than 1.4 solar masses (1.4 times the mass of our sun), the process ceases at the density of 1,000 tons per cubic inch, and the star becomes a white dwarf.  However, if the star was originally more massive, the white dwarf plasma can’t resist the gravitation pressures, and in rapid collapse, all nuclei of the star are converted to a gas of free neutrons.  Gravitational attraction compresses this neutron gas rapidly until a density of 10 tons per cubic inch is reached; at this point, the strong nuclear force resists further contraction.  If the mass of the star was between 1.4 and a few solar masses, the process stops here, and we have a neutron star. But if the original star was more massive than a few solar masses, even the strong nuclear forces cannot resist the gravitational crunch.  The neutrons are forced into one another to form heavier hadrons and these in turn coalesce to form heavier entities, of which we as yet know nothing.  At this point, a complete collapse of the stellar mass occurs; existing theories predict a collapse to infinite density and infinitely small dimensions  Well before this, however, the surface gravitational force would become so strong that no signal could ever leave the star - any photon emitted would fall back under gravitational attraction – and the star would become a black hole in space. This gravitational collapse poses a fundamental challenge to physics.  When the most widely accepted theories predict such improbable things as infinite density and infinitely small dimensions, it simply means that we are missing some vital insight.  This last happened in physics in the 1930’s, when we faced the fundamental paradox concerning atomic structure.  At that time, it was recognized that electrons moved in table orbits about nuclei in atoms. However, it was also recognised that if the charge is accelerated, as it must be to remain in orbit, it radiates energy; so, theoretically, the electron would be expected eventually to spiral into the nucleus and destroy the atom. Studies centred around this paradox led to the development of quantum mechanics.  It may well be that an equivalent t advance awaits us in investigating the theoretical problems presented by the phenomenon of gravitational collapse.

Q. The primary purpose of the passage is to 

Detailed Solution for Test: Reading Comprehension- 1 - Question 10

The discoveries of the white dwarf, neutron star, and black hole represent some of the most exciting developments in astrophysics in recent decades. These findings challenge physicists significantly, akin to the challenges posed by the failure of classical mechanics.

In the life cycle of a star, once all the hydrogen and helium fuel is exhausted, the balance between nuclear radiation pressure and gravitational force is disrupted, leading to a slow contraction. Key points include:

  • As compression increases, a very dense plasma forms.
  • If the star's mass is less than 1.4 solar masses, it becomes a white dwarf at a density of 1,000 tons per cubic inch.
  • If the star is more massive, the plasma cannot withstand gravitational pressure, resulting in rapid collapse into a gas of free neutrons.
  • This neutron gas compresses until it reaches a density of 10 tons per cubic inch, where the strong nuclear force stops further contraction.
  • If the star's mass is between 1.4 and a few solar masses, it stabilises as a neutron star.
  • For stars exceeding a few solar masses, even the strong nuclear forces cannot halt gravitational collapse.

In this situation, neutrons are pushed together, forming heavier particles, leading to a complete collapse into a state of infinite density and infinitely small dimensions. Before this collapse, the gravitational force becomes so intense that no signals can escape the star, effectively turning it into a black hole.

This phenomenon poses a fundamental challenge to current physics. The prediction of infinite density suggests we are missing crucial insights, reminiscent of the 1930s when physicists grappled with the paradox of atomic structure. At that time, it was understood that if electrons moved in stable orbits, they would lose energy and spiral into the nucleus, contradicting atomic stability. This paradox ultimately led to the development of quantum mechanics.

It is possible that we are on the brink of a similar breakthrough as we explore the theoretical issues arising from gravitational collapse.

Test: Reading Comprehension- 1 - Question 11

PASSAGE: The discoveries of the white dwarf, the neutron star, and the black hole, coming well after the discovery of the red giant, are among eh most exciting developments in decades because they may be well present physicists with their greatest challenge since the failure of classical mechanics.  In the life cycle of the star, after all of the hydrogen and helium fuel has been burned, the delicate balance between the outer nuclear radiation. Pressure and the stable gravitational force become disturbed, and slow contraction begins.  As compression increases, a very dense plasma forms.  If the initial star had a mass of less than 1.4 solar masses (1.4 times the mass of our sun), the process ceases at the density of 1,000 tons per cubic inch, and the star becomes a white dwarf.  However, if the star was originally more massive, the white dwarf plasma can’t resist the gravitation pressures, and in rapid collapse, all nuclei of the star are converted to a gas of free neutrons.  Gravitational attraction compresses this neutron gas rapidly until a density of 10 tons per cubic inch is reached; at this point, the strong nuclear force resists further contraction.  If the mass of the star was between 1.4 and a few solar masses, the process stops here, and we have a neutron star. But if the original star was more massive than a few solar masses, even the strong nuclear forces could not resist the gravitational crunch.  The neutrons are forced into one another to form heavier hadrons and these in turn coalesce to form heavier entities, of which we as yet know nothing.  At this point, a complete collapse of the stellar mass occurs; existing theories predict a collapse to infinite density and infinitely small dimensions  Well before this, however, the surface gravitational force would become so strong that no signal could ever leave the star - any photon emitted would fall back under gravitational attraction – and the star would become a black hole in space. This gravitational collapse poses a fundamental challenge to physics.  When the most widely accepted theories predict such improbable things as infinite density and infinitely small dimensions, it simply means that we are missing some vital insight.  This last happened in physics in the 1930’s, when we faced the fundamental paradox concerning atomic structure.  At that time, it was recognized that electrons moved in table orbits about nuclei in atoms. However, it was also recognised that if the charge is accelerated, as it must be to remain in orbit, it radiates energy; so, theoretically, the electron would be expected eventually to spiral into the nucleus and destroy the atom. Studies centred around this paradox led to the development of quantum mechanics.  It may well be that an equivalent t advance awaits us in investigating the theoretical problems presented by the phenomenon of gravitational collapse.
Q. What are the possible outcomes in the life cycle of a star after all of its fuel has been burned?

Detailed Solution for Test: Reading Comprehension- 1 - Question 11

In the passage, it is explained that after all of the hydrogen and helium fuel has been burned in a star, a delicate balance between the outer nuclear radiation pressure and the stable gravitational force becomes disturbed and slow contraction begins. The outcome of this contraction depends on the mass of the original star.

If the initial star had a mass of less than 1.4 solar masses, the contraction process ceases at a density of 1,000 tons per cubic inch, and the star becomes a white dwarf.

If the star was originally more massive, the white dwarf plasma can't resist the gravitational pressures, leading to a rapid collapse where all nuclei of the star are converted to a gas of free neutrons. The neutron gas is then compressed by gravitational attraction until a density of 10 tons per cubic inch is reached, at which point the strong nuclear force resists further contraction. This results in the formation of a neutron star.

However, if the original star was more massive than a few solar masses, even the strong nuclear forces cannot resist the gravitational crunch. 

Test: Reading Comprehension- 1 - Question 12

PASSAGE: The discoveries of the white dwarf, the neutron star, and the black hole, coming well after the discovery of the red giant, are among eh most exciting developments in decades because they may be well present physicists with their greatest challenge since the failure of classical mechanics.  In the life cycle of the star, after all of the hydrogen and helium fuel has been burned, the delicate balance between the outer nuclear radiation. Pressure and the stable gravitational force become disturbed, and slow contraction begins.  As compression increases, a very dense plasma forms.  If the initial star had a mass of less than 1.4 solar masses (1.4 times the mass of our sun), the process ceases at the density of 1,000 tons per cubic inch, and the star becomes a white dwarf.  However, if the star was originally more massive, the white dwarf plasma can’t resist the gravitation pressures, and in rapid collapse, all nuclei of the star are converted to a gas of free neutrons.  Gravitational attraction compresses this neutron gas rapidly until a density of 10 tons per cubic inch is reached; at this point, the strong nuclear force resists further contraction.  If the mass of the star was between 1.4 and a few solar masses, the process stops here, and we have a neutron star. But if the original star was more massive than a few solar masses, even the strong nuclear forces could not resist the gravitational crunch.  The neutrons are forced into one another to form heavier hadrons and these in turn coalesce to form heavier entities, of which we as yet know nothing.  At this point, a complete collapse of the stellar mass occurs; existing theories predict a collapse to infinite density and infinitely small dimensions  Well before this, however, the surface gravitational force would become so strong that no signal could ever leave the star - any photon emitted would fall back under gravitational attraction – and the star would become a black hole in space. This gravitational collapse poses a fundamental challenge to physics.  When the most widely accepted theories predict such improbable things as infinite density and infinitely small dimensions, it simply means that we are missing some vital insight.  This last happened in physics in the 1930’s, when we faced the fundamental paradox concerning atomic structure.  At that time, it was recognized that electrons moved in table orbits about nuclei in atoms. However, it was also recognised that if the charge is accelerated, as it must be to remain in orbit, it radiates energy; so, theoretically, the electron would be expected eventually to spiral into the nucleus and destroy the atom. Studies centred around this paradox led to the development of quantum mechanics.  It may well be that an equivalent t advance awaits us in investigating the theoretical problems presented by the phenomenon of gravitational collapse.

Q. According to the passage, the primary purpose of the passage is to

Detailed Solution for Test: Reading Comprehension- 1 - Question 12

The primary purpose of the passage is to explain how the collapse of stars challenges accepted theories of physics. The passage discusses the discovery of white dwarfs, neutron stars, and black holes, and how their formation and behavior challenge current theories in physics.

Test: Reading Comprehension- 1 - Question 13

PASSAGE: The discoveries of the white dwarf, the neutron star, and the black hole, coming well after the discovery of the red giant, are among eh most exciting developments in decades because they may be well present physicists with their greatest challenge since the failure of classical mechanics.  In the life cycle of the star, after all of the hydrogen and helium fuel has been burned, the delicate balance between the outer nuclear radiation. Pressure and the stable gravitational force become disturbed, and slow contraction begins.  As compression increases, a very dense plasma forms.  If the initial star had a mass of less than 1.4 solar masses (1.4 times the mass of our sun), the process ceases at the density of 1,000 tons per cubic inch, and the star becomes a white dwarf.  However, if the star was originally more massive, the white dwarf plasma can’t resist the gravitation pressures, and in rapid collapse, all nuclei of the star are converted to a gas of free neutrons.  Gravitational attraction compresses this neutron gas rapidly until a density of 10 tons per cubic inch is reached; at this point, the strong nuclear force resists further contraction.  If the mass of the star was between 1.4 and a few solar masses, the process stops here, and we have a neutron star. But if the original star was more massive than a few solar masses, even the strong nuclear forces could not resist the gravitational crunch.  The neutrons are forced into one another to form heavier hadrons and these in turn coalesce to form heavier entities, of which we as yet know nothing.  At this point, a complete collapse of the stellar mass occurs; existing theories predict a collapse to infinite density and infinitely small dimensions  Well before this, however, the surface gravitational force would become so strong that no signal could ever leave the star - any photon emitted would fall back under gravitational attraction – and the star would become a black hole in space. This gravitational collapse poses a fundamental challenge to physics.  When the most widely accepted theories predict such improbable things as infinite density and infinitely small dimensions, it simply means that we are missing some vital insight.  This last happened in physics in the 1930’s, when we faced the fundamental paradox concerning atomic structure.  At that time, it was recognized that electrons moved in table orbits about nuclei in atoms. However, it was also recognised that if the charge is accelerated, as it must be to remain in orbit, it radiates energy; so, theoretically, the electron would be expected eventually to spiral into the nucleus and destroy the atom. Studies centred around this paradox led to the development of quantum mechanics.  It may well be that an equivalent t advance awaits us in investigating the theoretical problems presented by the phenomenon of gravitational collapse.
Q. The author asserts that the discoveries of the white dwarf, the neutron star, and the black hole are significant because these discoveries. 

Detailed Solution for Test: Reading Comprehension- 1 - Question 13

The discoveries of the white dwarf, neutron star, and black hole represent significant milestones in astrophysics. They challenge physicists with profound questions, especially following the earlier discovery of the red giant. Key points include:

  • After a star exhausts its hydrogen and helium fuel, the balance between nuclear radiation pressure and gravitational force is disturbed.
  • This leads to a slow contraction, forming a dense plasma within the star.
  • If the star's mass is less than 1.4 solar masses, it becomes a white dwarf at a density of 1,000 tons per cubic inch.
  • For more massive stars, the gravitational pressure causes rapid collapse, creating a neutron gas with a density of 10 tons per cubic inch.
  • In stars between 1.4 and a few solar masses, this process halts, resulting in a neutron star.
  • For stars exceeding a few solar masses, even the strong nuclear forces cannot stop the gravitational collapse.
  • This collapse leads to theories predicting infinite density and infinitely small dimensions, highlighting a critical gap in our understanding of physics.
  • The situation mirrors historical challenges in physics, such as the paradox surrounding atomic structure, which spurred the development of quantum mechanics.

As we study gravitational collapse, we may be on the brink of another significant scientific breakthrough.

Test: Reading Comprehension- 1 - Question 14

PASSAGE: The discoveries of the white dwarf, the neutron star, and the black hole, coming well after the discovery of the red giant, are among eh most exciting developments in decades because they may be well present physicists with their greatest challenge since the failure of classical mechanics.  In the life cycle of the star, after all of the hydrogen and helium fuel has been burned, the delicate balance between the outer nuclear radiation. Pressure and the stable gravitational force become disturbed, and slow contraction begins.  As compression increases, a very dense plasma forms.  If the initial star had a mass of less than 1.4 solar masses (1.4 times the mass of our sun), the process ceases at the density of 1,000 tons per cubic inch, and the star becomes a white dwarf.  However, if the star was originally more massive, the white dwarf plasma can’t resist the gravitation pressures, and in rapid collapse, all nuclei of the star are converted to a gas of free neutrons.  Gravitational attraction compresses this neutron gas rapidly until a density of 10 tons per cubic inch is reached; at this point, the strong nuclear force resists further contraction.  If the mass of the star was between 1.4 and a few solar masses, the process stops here, and we have a neutron star. But if the original star was more massive than a few solar masses, even the strong nuclear forces could not resist the gravitational crunch.  The neutrons are forced into one another to form heavier hadrons and these in turn coalesce to form heavier entities, of which we as yet know nothing.  At this point, a complete collapse of the stellar mass occurs; existing theories predict a collapse to infinite density and infinitely small dimensions  Well before this, however, the surface gravitational force would become so strong that no signal could ever leave the star - any photon emitted would fall back under gravitational attraction – and the star would become a black hole in space. This gravitational collapse poses a fundamental challenge to physics.  When the most widely accepted theories predict such improbable things as infinite density and infinitely small dimensions, it simply means that we are missing some vital insight.  This last happened in physics in the 1930’s, when we faced the fundamental paradox concerning atomic structure.  At that time, it was recognized that electrons moved in table orbits about nuclei in atoms. However, it was also recognised that if the charge is accelerated, as it must be to remain in orbit, it radiates energy; so, theoretically, the electron would be expected eventually to spiral into the nucleus and destroy the atom. Studies centred around this paradox led to the development of quantum mechanics.  It may well be that an equivalent t advance awaits us in investigating the theoretical problems presented by the phenomenon of gravitational collapse.
Q. What happens to a star that initially had a mass greater than a few solar masses during the process of gravitational collapse?

Detailed Solution for Test: Reading Comprehension- 1 - Question 14

Explanation: According to the passage, if the original star was more massive than a few solar masses, even the strong nuclear forces cannot resist the gravitational crunch. This leads to a complete collapse of the stellar mass, resulting in a black hole in space. The passage states that existing theories predict a collapse to infinite density and infinitely small dimensions for stars that become black holes. Therefore, option E is the correct answer.

Test: Reading Comprehension- 1 - Question 15

PASSAGE: The discoveries of the white dwarf, the neutron star, and the black hole, coming well after the discovery of the red giant, are among eh most exciting developments in decades because they may be well present physicists with their greatest challenge since the failure of classical mechanics.  In the life cycle of the star, after all of the hydrogen and helium fuel has been burned, the delicate balance between the outer nuclear radiation. Pressure and the stable gravitational force become disturbed, and slow contraction begins.  As compression increases, a very dense plasma forms.  If the initial star had a mass of less than 1.4 solar masses (1.4 times the mass of our sun), the process ceases at the density of 1,000 tons per cubic inch, and the star becomes a white dwarf.  However, if the star was originally more massive, the white dwarf plasma can’t resist the gravitation pressures, and in rapid collapse, all nuclei of the star are converted to a gas of free neutrons.  Gravitational attraction compresses this neutron gas rapidly until a density of 10 tons per cubic inch is reached; at this point, the strong nuclear force resists further contraction.  If the mass of the star was between 1.4 and a few solar masses, the process stops here, and we have a neutron star. But if the original star was more massive than a few solar masses, even the strong nuclear forces could not resist the gravitational crunch.  The neutrons are forced into one another to form heavier hadrons and these in turn coalesce to form heavier entities, of which we as yet know nothing.  At this point, a complete collapse of the stellar mass occurs; existing theories predict a collapse to infinite density and infinitely small dimensions  Well before this, however, the surface gravitational force would become so strong that no signal could ever leave the star - any photon emitted would fall back under gravitational attraction – and the star would become a black hole in space. This gravitational collapse poses a fundamental challenge to physics.  When the most widely accepted theories predict such improbable things as infinite density and infinitely small dimensions, it simply means that we are missing some vital insight.  This last happened in physics in the 1930’s, when we faced the fundamental paradox concerning atomic structure.  At that time, it was recognized that electrons moved in table orbits about nuclei in atoms. However, it was also recognised that if the charge is accelerated, as it must be to remain in orbit, it radiates energy; so, theoretically, the electron would be expected eventually to spiral into the nucleus and destroy the atom. Studies centred around this paradox led to the development of quantum mechanics.  It may well be that an equivalent t advance awaits us in investigating the theoretical problems presented by the phenomenon of gravitational collapse.
Q. The author introduces the discussion of the paradox concerning atomic structures in order to 

Detailed Solution for Test: Reading Comprehension- 1 - Question 15

The discoveries of the white dwarf, neutron star, and black hole represent significant developments in astrophysics, challenging our understanding since the limitations of classical mechanics.

In a star's life cycle, after burning all its hydrogen and helium fuel, the balance between nuclear radiation pressure and gravitational force is disrupted, leading to:

  • Initial slow contraction of the star.
  • Formation of a dense plasma as compression increases.

If the star's mass is less than 1.4 solar masses (1.4 times the Sun's mass), it becomes a white dwarf at a density of 1,000 tons per cubic inch.

For more massive stars:

  • The white dwarf plasma cannot withstand gravitational pressure, leading to a rapid collapse.
  • All nuclei convert into a gas of free neutrons, reaching a density of 10 tons per cubic inch.
  • If the mass is between 1.4 and a few solar masses, the result is a neutron star.
  • For stars exceeding a few solar masses, gravitational collapse continues, forcing neutrons together to form heavier particles.

Eventually, this collapse leads to:

  • A point of infinite density and dimensions, where current theories struggle to explain.
  • A black hole, where the gravitational force is so strong that no signals can escape; any emitted photon falls back.

This gravitational collapse presents a fundamental challenge to physics. The occurrence of such improbable predictions, like infinite density, indicates that we are missing critical insights. This situation mirrors the challenges faced in the 1930s regarding atomic structure, which led to the development of quantum mechanics.

Investigating these gravitational collapse phenomena may lead to a similar breakthrough in our understanding of the universe.

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