QUESTION: 197

Current farm policy is institutionalized penalization of consumers. It increases food prices for middle- and low- income families and costs the taxpayer billions of dollars a year.

Which of the following statements, if true, would provide support for the author’s claims above?

I) Farm subsidies amount to roughly $20 billion a year in federal payouts and $12 billion more in higher food prices.
II) According to a study by the Department of Agriculture, each $1 of benefits provided to farmers for ethanol production costs consumers and taxpayers $4.
III) The average full-time farmers have an average net worth of over $300,000.

I only
II only
III only
I and II only
I, II, and III

Answer(s): D

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QUESTION: 198

Reva: Using extraneous incentives to get teenagers to change their attitude toward school and schoolwork won’t work. Take the program in West Virginia, for instance, where they tried to reduce their dropout rate by revoking the driving licenses of kids who left school. The program failed miserably.

Anne: It’s true that the West Virginia program failed, but many schools have devised incentive programs that have been very successful in improving attendance and reducing discipline problems.

According to Anne, the weak point in Reva’s claim is that it

fails to consider the possibility that the majority of potential dropouts in West Virginia do not have driving licenses
doesn’t provide any exact figures for the dropout rate in West Virginia before and during the program
ignores a substantial body of evidence showing that parents and employers have been using extrinsic incentives with positive results for years
assumes that a positive incentive — a prize or a reward — will be no more effective than a negative incentive, like the revoking of a driving license
is based on a single example, the incentive program in West Virginia, which may not be typical

Answer(s): E

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QUESTION: 199

In many surveys, American consumers have expressed a willingness to spend up to 10 percent more for products that are ecologically sound. Encouraged by such surveys, Bleach-O Corporation promoted a new laundry detergent, Bleach-O Green, as safer for the environment. Bleach-O Green cost 5 percent more than typical detergents. After one year, Bleach-O Green had failed to capture a significant share of the detergent market and was withdrawn from sale.

Which of the following questions is LEAST likely to be relevant in determining the reasons for the failure of Bleach-O Green?

How effective as a detergent was Bleach-O Green?
How many other detergents on the market were promoted as safe for the environment?
How much more did Bleach-O Green cost to manufacture than ordinary detergents?
To what extent did consumers accept the validity of Bleach-O Green advertised and promoted to consumers?
How effectively was Bleach-O Green advertised and promoted to consumers?

Answer(s): C

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QUESTION: 200

The burden of maintaining the U.S. highway system falls disproportionately on the trucking industry. Trucks represent only about 10 percent of the vehicles on U.S. roads. Yet road use taxes assessed on trucks amount to almost half the taxes paid for highway upkeep and repair.

Which of the following, if true, would most weaken the argument above?

The trucking industry has enjoyed record after-tax profits in three of the past four years.
Because of their weight, trucks cause over 50 percent of the damage sustained by highway surfaces each year.
Without an economically viable trucking industry, the cost of goods in the United States would rise significantly.
Road use taxes paid by trucking companies have decreased by 3 percent over the past five years.
Due to years of neglect, U.S. highways today are badly in need of major repairs and rebuilding.

Answer(s): B

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QUESTION: 200