Test: Reading Comprehension- 2 - GMAT MCQ

The passage discusses the opportunities and risks faced by minority-owned businesses in the United States, focusing on challenges such as financial overextension, dependence on large customers, and competition from established companies. It outlines how increased patronage can be beneficial yet risky for minority enterprises, emphasizing the potential pitfalls they may encounter despite the opportunities presented by government initiatives and corporate contracts.

The correct answer to the question is:

- E. What is one set of conditions under which a small business might find itself financially overextended?

Explanation:
- Minority-owned businesses risk expanding too fast due to increased patronage.
- Small concerns often lack financial resources for necessary investments.
- When subcontracts are reduced, fixed expenses can become overwhelming.
- Elaborate formal estimates and bids consume resources without guarantee of orders.
- Dependency on a single corporate benefactor can lead to complacency and financial struggles.

- Civil rights activists argue that one challenge for minority-owned businesses is the limited access to lucrative contracts from large companies.
- These activists believe that the lack of opportunities to secure business created by large corporations has hindered the growth and establishment of minority-owned businesses.
- The passage emphasizes that providing minority-owned businesses with access to sizable orders and subcontracts from large companies is crucial for their success and growth in the business world.

- Large businesses facing delays in securing bids for subcontracts risk potentially crippling fixed expenses.
- These firms need to invest significantly to fulfill subcontracted work, leading to financial strain if contracts are reduced.
- Time and resource-intensive bidding processes can be frustrating for small businesses.
- Orders must materialize promptly to maintain business morale and financial stability.
- Delays in securing contracts can threaten the financial health of small minority-owned enterprises.

- Correct Answer: C: Try to expand its customer base to avoid becoming dependent on the corporation
- Explanation:
- Minority-owned concerns that heavily rely on a single large corporate customer face the risk of dependency.
- To mitigate this risk, it is essential for the minority-owned concern to broaden its customer base.
- By diversifying their clientele, these businesses reduce the vulnerability associated with being overly reliant on one major customer.
- This strategy helps them maintain flexibility, competitiveness, and sustainability in the long term.

- The correct answer is B: more specific.
- Federal and local agencies have set specific percentage goals for apportioning parts of public works contracts to minority enterprises, as mentioned in the passage.
- These percentage goals are more targeted and explicit compared to the broader requirement set by law.
- By being more specific, these goals provide a clear framework for companies to follow in order to support minority-owned businesses.
- This specificity helps in ensuring a focused effort towards increasing opportunities for minority businesses in contracting.

- The correct answer is E.
- In this question, we are looking for the statement that would weaken the author's assertion that corporate response to federal requirements in the 1970s was substantial.
- Option E weakens this assertion by stating that the $1.1 billion in 1977 represented the same percentage of total corporate spending as $77 million in 1972.
- This implies that the increase in spending with minority-owned businesses from $77 million to $1.1 billion might not be as substantial as it appears at first glance since it can be seen as a proportionate increase rather than an absolute increase.

- The passage is most likely to have appeared in a business magazine.
- The content discusses the interactions between minority-owned businesses, corporate contracts, and the risks and opportunities involved.
- Business magazines typically cover topics related to business trends, corporate strategies, and market dynamics, making them a suitable platform for the discussion presented in the passage.
- The context of the passage aligns well with the type of content commonly found in business magazines, making option A the most appropriate choice.

- The correct answer is C.
- The passage highlights that corporations responded significantly to working with minority subcontractors in the 1970s.
- It mentions a substantial increase in corporate contracts with minority businesses during that time.
- Projections estimate a continued rise in corporate contracts with minority businesses into the 1980s and beyond.
- This indicates that the significant corporate response in the 1970s is likely to be sustained and potentially increased throughout the 1980s.

- The primary purpose of the passage is to analyze a phenomenon.
- It delves into the significance of song in territorial birds like the indigo bunting, detailing how song functions in securing breeding areas and interspecies recognition.
- Through observations and experiments, the passage explores the role of song figures in species recognition and the balance between song stability for species recognition and variation for individual recognition.
- It highlights the importance of song characteristics like frequency range, duration, and spacing in communication and survival strategies.

"In our studies of isolated buntings we found that male indigo buntings are capable of singing many more types of figures than they usually do. Thus, it would seem that they copy their figures from other buntings they hear singing." This indicates that the figures sung by the indigo bunting are learned from other indigo buntings. 

The correct answer is: They are learned from other indigo buntings.

- I. How much variations, if any, is there in the figure types produced by indigo buntings in different locales?
- This question is indirectly addressed in the investigation. The study found that more than 90% of figures produced by indigo buntings across different regions are similar. This implies a high degree of consistency in figure types among different populations.

- II. Do local populations of indigo buntings develop their own dialects of figure types?
- This inference is supported by the investigation. The study revealed that while some unique figures exist in different geographical populations, over 90% of figures are remarkably stable across regions. This suggests a shared repertoire of figures among indigo buntings.

- III. Do figure similarities among indigo buntings decline with increasing geographic separation?
- This question is indirectly answered in the investigation. The study demonstrates that despite geographic separation, the majority of indigo bunting figures remain stable. Therefore, figure similarities do not significantly decline with increasing geographic separation.

Hence, the correct answer is E: I, II, and III.

- The limited number of indigo bunting figures primarily enhances species recognition by decreasing the variety of figure patterns the bird must respond to.
- This limitation ensures that each species has a distinct set of figures for clear-cut species recognition.
- By restricting the variation and change in figures, the integrity of the species is maintained.
- It allows for individual recognition within the species without causing confusion between different species.
- Ultimately, this balance between figure stability and variation aids in both species and individual recognition.

- The correct answer is B: Rule out visual cues as a factor in species recognition.
- Placing a dummy of a male indigo bunting near the tape recorder that played songs of different species helped eliminate the possibility that the indigo buntings were responding to visual cues.
- By using a dummy, researchers ensured that the indigo buntings' responses were based solely on auditory cues, specifically the songs being played.
- This method helped isolate the role of the song itself in species recognition without the influence of visual stimuli.

- Playing a normal indigo bunting song backwards aimed to determine how specific a figure shape must be for recognition by the indigo bunting.
- By altering the detailed forms of the figures without changing frequency ranges or temporal features, the experiment tested the recognition patterns of the male indigo buntings.
- The response to the backward song indicated that a wide range of figure shapes can evoke recognition.
- Specific configurations may not be crucial for interspecies recognition; instead, adherence to frequency range, duration, and spacing intervals is essential.